Bloomberg
Gold futures settled lower on Friday for the first time in six sessions after a better-than-expected U.S. employment report buoyed the dollar and dulled some of the metal’s investment appeal.
For the week, however, gold scored a gain as investors viewed the metal as a safer investment against a backdrop of worries over China’s economy and a recent plunge in its stock market.
February gold GCG6, -0.33% fell by $9.90, or 0.9%, to settle at $1,097.90 an ounce on Comex. The commodity saw a weekly climb of 3.6%, which was the largest since the week ended Aug. 21, 2015, according to FactSet data.
A closely watched jobs report showed the U.S. economy added a better-than-expected 292,000 jobs in December, while the unemployment rate stayed at 5%, helped extend gold’s decline.
A strong employment report could give the Federal Reserve confidence to raise interest rates at a quickened pace—a move that could diminish the appeal of gold, which doesn’t offer a yield.
On the other hand, Naeem Aslam, chief market analyst at AvaTrade, pointed out that if the Fed is “confident about the economy, that means they will be hawkish in relation to their rate hike and this is not a good news for China.”
So, “you may not want to be bearish on gold for some time, until or unless we see the economic situation picking up in China,” he said.
Aslam noted that the $1,100/oz is an important level for gold. A settlement above that number would be a bullish sign for the metal, he said.
But flight-to-safety buying, sparked by skidding global stock markets, ebbed after China avoided another scary slide in its stock market Friday. Chinese regulators suspended circuit-breakers that were blamed for exacerbating volatility in its stock exchanges. The Shanghai Composite IndexSHCOMP, +1.97% finished 2% higher Friday in Asia, undoing some of Thursday’s 7% plunge.
Read: Can a strong jobs report stop the carnage on Wall Street?
“After the sharp rally this week, I would’ve expected profit taking alone to have shaved much more from gold than we’re seeing,” said Brien Lundin, editor of Gold Newsletter.
Rounding out action in the metals, March silver SIH6, -2.92% fell 42.6 cents, or 3%, to $13.918 an ounce, but it still saw a weekly gain of 0.8%.
March high-grade copper HGH6, -0.35% ended flat at $2.022 a pound, down roughly 5.3% for the week. April platinum PLJ6, +0.31% settled at $878.70 an ounce, up $1.20, or 0.1%, for the session though down about 1.6% for the week. March palladium PAH6, +0.28% shed 60 cents, or 0.1%, to $493.60 an ounce, ending the week with a 12.2% loss.
