But dollar keeps pressure on precious metal following last session's slide
By Nick Godt, MarketWatch
NEW YORK (MarketWatch) -- Gold futures came off earlier lows on Friday after news of a drop in the U.S. jobless rate, but ongoing fear about sovereign debt in Europe still supported the dollar and kept the precious metal under pressure, following its biggest slide in sixteen months in the previous session.
The dollar came off highs but remained near a seven-month high, after the Labor Department said the unemployment rate fell to 9.7% in January from 10% in December.
Economists surveyed by MarketWatch had expected the unemployment rate to remain steady in double-digits.
The U.S. economy still shed 20,000 jobs in January, while economists expected the economy to add jobs last month.
Crude oil futures also turned higher after the report.
But gold for April delivery remained down $3.80, or 0.4%, at $1,059.30 an ounce.
The dollar index (DXY 80.07, +0.16, +0.20%) , which measures the U.S. unit against a basket of six major counterparts, was up 0.2% to 80.20.
A stronger U.S. currency typically pressures gold and other dollar-denominated commodities as it makes them more expensive for holders of other currencies. Gold also loses its appeal as a hedge against weaker currencies.
Gold saw its biggest slide in 16 months Thursday, joining other metals in a broad sell-off of commodities and stocks, as investors fled to the safety of the U.S. dollar over mounting concerns about the debt of several European countries.
"This may be another upcoming buying opportunity as we look at open interest and delivery notices later after the drastic selling," said George Gero, metals analyst at RBC Wealth Management, in emailed comments.
