Last Updated : 03 September 2010 at 20:10 IST

Comex Gold down, pressured by better-than-expected US jobs data

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By Jim Wyckoff of Kitco News
Comex Gold futures prices are moderately lower in trading Friday morning, pressured by a U.S. employment report that showed only around half of the U.S. jobs losses that were expected, along with stronger-than-expected growth in private-sector jobs.

Gold traders are also taking profits ahead of the weekend and following recent good gains. December gold last traded down $12.40 an ounce at $1,241.00. Spot gold was last quoted down $12.10 at $1,239.50.

The August U.S. employment report showed non-farm payrolls declined by 54,000, compared to forecasts for a drop of around 120,000. Also, the June non-farm payroll decline was revised up. U.S. private sector jobs rose a stronger-than-expected 67,000 in August, with traders were looking for a rise of around 40,000.

The U.S. dollar index initially popped higher on the jobs news, but has since dropped back below unchanged. The U.S. stock indexes rallied and U.S. Treasuries sold off on the jobs data, which suggests investor risk appetite has increased in the wake of the jobs report--and that is bearish for gold, which is viewed as a safe-haven investment asset.

Look for more volatile trading action during the next couple hours, as traders continue to digest the U.S. jobs report. Trading next week is likely to be extra important for the Gold market and for other markets, as U.S. and European traders will have returned from summertime vacations and the U.S. holiday weekend more fully focused on the markets and the fundamentals that impact the markets--namely the economic and financial conditions in the U.S. and Europe.

The London A.M. gold fixing was $1,252.00 versus the previous London P.M. fixing of $1,248.00.

Technically, Comex gold bulls still have the overall near-term technical advantage. Prices hit a fresh two-month high on Wednesday. However, the gold market bulls do not want to see a bearish weekly low close on Friday. Comex gold prices are still in a six-week-old uptrend on the daily bar chart.

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