Gold rallied more than 1% on Friday as the dollar retreated after U.S. jobs data were mostly in line with expectations, but still posted a third consecutive weekly decline pressured by a high interest rate environment.
* Spot gold rose 0.8% to $1,710.29 an ounce by 1745 GMT. Prices maintained a 1.5% loss during the week.
* US gold futures closed 0.8% higher at $1,722.6.
* “The jobs numbers were very close to market expectations. The market sees it as a golden number as it does not suggest weakness, but it is not too strong to provoke an even more aggressive Fed,” said Jim Wyckoff, senior analyst at Kitco Metals. “Gold is seeing a relief short-covering rally.”
* Nonfarm payrolls increased by 315,000 last month, the Labor Department said in its employment report. Economists polled by Reuters had forecast payrolls to rise by 300,000.
* The dollar index fell about 0.1%, making gold cheaper for foreign buyers, while Treasury yields also fell on the day.
* “A slightly weaker dollar and short-term US Treasury yields have given some relief to gold. However, this has not changed the underlying downward trend in gold prices,” said Piero Cingari, analyst at Capital .com.
* Gold has come under pressure of late as global central banks raise interest rates to combat runaway inflation. Higher rates increase the opportunity cost of holding the non-performing asset.
* In other precious metals, spot gained 0.8% to $17.99 an ounce; platinum rose 0.8% to $834.77 ; and palladium added 0.5% to $2,022.43. All three posted declines for the week.