MW: Gold falls first day in four after rallying near $1,000 an ounce
NEW YORK (MarketWatch) -- Gold futures fell Friday for the first day in four, after rallying near $1,000 an ounce in the previous session, as the U.S. dollar strengthened and as a jobs report that fell largely in line with expectations curbed gold's safe-haven appeal.
Despite Friday's loss, gold futures are poised for their best week in more than four months, largely due to gains in the previous two sessions. Holdings in the biggest gold exchange-traded fund rose the most in three months on Thursday.
December gold futures, the most active contract, slid $7.70, or 0.8%, to $990 an ounce on the Comex division of the New York Mercantile Exchange. The contract is set to end the week up more than 3%, the best weekly record for a futures contract since April 24.
The London afternoon fixing, a global gold benchmark, stood at $989, the highest level since Feb. 20. The benchmark ended the week up 3.5%, also the biggest weekly gain since April.
"Over the last few days gold has begun to trade as an asset class of its own," said Brian Kelly, chief executive officer of Kanundrum Research, a commodities and macroeconomic research firm.
However, "I would not be surprised to see a technical sell-off as the yellow metal finds its footing. It is entirely possible that gold retreats to $960 before it stabilizes."
Holdings in SPDR Gold Trust (GLD 97.30, -0.16, -0.16%) rose 14.65 metric tons to 1,078.01 metric tons Thursday, the biggest one-day gain since June 1. December gold rose as high as $999.50 Thursday.
"We continue to expect a seasonal pickup in jewelry demand, especially as the Indian wedding season is approaching, to provide a floor for prices and limit the downside," said Natalya Naqvi, a precious metals analyst at Barclays Capital.
Gold prices typically rise in September, an analysis of the historical record shows, as the start of holiday seasons in the world's biggest gold-consuming countries tends to drive up demand.
Gold made gains for the past 16 out of 20 Septembers. That's a better track record than any other month of the year, a MarketWatch analysis of gold prices measured by the London fixing showed. See full story.
In currencies Friday, the dollar rose against most of its major rivals, with the dollar index (DXY 78.52, +0.05, +0.06%) up 0.2% to 78.658. A stronger dollar tends to add downward pressures in dollar-denominated gold prices.
The Labor Department reported August nonfarm payrolls fell 216,000, fewer than the expectation of a drop of 233,000. The unemployment rate, however, rose to 9.7%, higher than the expectation of 9.5%.
In other metals dealings, silver for December delivery fell 21.5 cents, or 1.3%, to $16.075 an ounce. The contract is set to end the week up more than 8%.
October platinum rose slightly to $1,255 an ounce, while December palladium fell 0.3% to $293 an ounce.
Copper for December delivery fell 0.4% to $2.854 a pound.
Separately, Rio Tinto Ltd. (RTP 158.34, +2.01, +1.29%) said it has suspended talks with Chinese steel mills over iron-ore pricing, citing the detention of the global mining company's negotiators in China, reports said Friday. See full story.
