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PRECIOUS-Gold slips on strong dollar ahead of U.S. jobs data
March 8, 2017 / 11:14 AM / 9 months ago

PRECIOUS-Gold slips on strong dollar ahead of U.S. jobs data

    * Focus on timing of U.S. rate hike
    * Markets await Friday's U.S. non-farm payroll data
    * Silver, platinum at lowest since January

 (Updates prices; adds comment, byline, NEW YORK dateline)
    By Marcy Nicholson and Zandi Shabalala
    NEW YORK/LONDON, March 8 (Reuters) - Gold prices extended
losses to a five-week low on Wednesday as the dollar gathered
strength on the prospect of a U.S. interest rate hike.
    Investors are awaiting February non-farm payrolls data on
Friday as a barometer of the U.S. economy after Federal Reserve
Chair Janet Yellen said last week the central bank was poised to
lift rates provided jobs and inflation data held up.
    These comments were seen as cementing plans for an increase
at the Fed's March 14-15 meeting.            
    Spot gold        was down 0.5 percent at $1,209.49 an ounce
by 2:59 p.m. EST (1959 GMT), after touching its lowest since
Feb. 1 at $1,206.05, putting it on track for its fifth straight
session in the red.
    The most active U.S. gold         futures for April delivery
settled down 0.6 percent at $1,209.40. 
    "Non-farm payrolls ... will provide final confirmation of a
rate hike next week and this could put more pressure on gold,"
Julius Baer commodities analyst Carsten Menke said
    Higher rates tend to put pressure on gold prices because
they raise the opportunity cost of holding non-yielding bullion
while boosting the dollar, in which it is priced.
    The dollar index       , which pits the greenback against
six major currencies, rose 0.3 percent.
    "Despite the recent selloff we think that gold prices have
been very resilient, given the circumstances," said Georgette
Boele, precious metals analyst for ABN Amro, pointing to the
rise in two-year-U.S. Treasury yields and strong U.S. equity
     The ADP National Employment Report showed its biggest
increase in more than a year in February, suggesting the U.S.
economy remains on solid ground.             
    "It puts upward pressure on both the consensus and our
forecast for payrolls on Friday," said Royce Mendes, director
and senior economist at CIBC Capital Markets in Toronto.
    On the other hand, ETF Securities' Martin Arnold said he
expected the backdrop of political risk in France and a lack of
policy certainty in the United States to create support for gold
prices as the interest rate increase was already priced in.
    "And if the Fed doesn't follow up their tough talk with
action then its certainly a bullish environment for gold,"
Arnold said, referring to expectations of three rate hikes this
    In other precious metals, silver        slipped 1.3 percent
to $17.26 per ounce, after tapping its lowest since Jan. 31 at
    Platinum        fell 1.4 percent to $946.45 per ounce, after
falling to $941.50, the lowest since Jan. 5.
    Palladium        eased 0.8 percent to $766 per ounce.  

 (Additional reporting by Arpan Varghese in Bengaluru; editing
by Mark Potter and Marguerita Choy)

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