Investing.com - Gold prices fell on Friday as the dollar strengthened after the latest U.S. jobs report showed that the economy added more jobs than forecast in January and wage growth accelerated.
Gold futures for April delivery settled down 0.91% at $1,335.70 on the Comex division of the New York Mercantile Exchange. For the week, prices were down 1.47%.
Prices of the precious metal have fallen back since hitting their highest level since August 2016 on January 26 as the dollar stabilized and Treasury yields have surged.
The U.S. economy created 200,000 new jobs last month, the Labor Department reported Friday and average hourly earnings rose 2.9% from a year earlier, the most since 2009.
A stronger dollar makes gold more expensive for overseas buyers. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.63% to 89.04 late Friday.
The uptick in wage growth boosted the outlook for inflation and underlined the case for the Fed to raise interest rates at a faster pace this year.
The U.S. central bank left rates unchanged last week but said it anticipated inflation would likely rise in 2018, underlining expectations that borrowing costs will continue to increase. The Fed currently projects three rate hikes for this year.
Expectations for higher interest rates are typically negative for gold as the precious metal struggles to compete with yield-bearing assets like Treasury’s when borrowing costs rise.
Elsewhere in precious metals trading, silver dropped 3.5% to $16.55 a troy ounce and recorded a 4.77% weekly decline.
Platinum settled at $995.90, down 1.18% for the day and was down 1.73% for the week.
Among base metals, copper for March delivery was down 0.84% at $3.182 in late trade.
In the week ahead, investors will be looking to political wrangling in Washington over the country’s finances ahead of the Feb. 8 spending deadline and the debt ceiling issue.
In what is set to be a relatively light week on the economic calendar, central bank meeting in the UK, Australia and New Zealand will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, February 5
China is to publish its Caixin services index.
The UK is to release data on service sector activity.
In the U.S., the Institute for Supply Management is to publish its manufacturing index.
Later Monday, ECB head Mario Draghi is to testify on the central bank’s Annual Report for 2016 before the European Parliament.
Tuesday, February 6
Australia is to release data on trade and retail sales. Meanwhile, the Reserve Bank of Australia is to announce its benchmark interest rate and publish a rate statement which outlines economic conditions and the factors affecting the monetary policy decision.
Both Canada and the U.S. are to produce trade data; Canada is also to report on the Ivey manufacturing index.
Wednesday, February 7
New Zealand is to publish its jobs report for the fourth quarter.
The UK is to release industry data on house price inflation.
Canada is to produce a report on building permits.
New York Fed President William Dudley is to speak at an event in New York.
Thursday, February 8
The Reserve Bank of New Zealand is to announce its benchmark interest rate and publish its rate statement. The announcement is to be followed by a press conference.
Australia is to release a report on business confidence.
China is to publish data on trade.
The Bank of England is to announce its latest monetary policy decision and publish its quarterly inflation report.
Canada is to report on new house price inflation.
The U.S. is to publish the weekly report on initial jobless claims.
Friday, February 9
China is to release inflation data.
The UK is to release data on trade and manufacturing production.
Canada is to round up the week with its latest employment report.