* Stocks jump to two-week high after U.S. data* Report shores up bets on more U.S. rate hikes* GRAPHIC-2018 asset returns: (Updates prices, adds comment)By Jan HarveyLONDON, March 12 (Reuters) - Gold fell on Monday as theprevious session's upbeat U.S. payrolls data sparked a freshrally in stock markets and shored up expectations that theFederal Reserve would press ahead with further interest raterises this year.
World stocks hit a two-week high on Monday after Friday'sstrong jobs data helped offset investors' concerns about thepotential for a trade war between the United States and othermajor economies. Spot gold was down 0.5 percent at $1,316.98 an ounceat 1435 GMT, while U.S. gold futures for April deliverywere 0.5 percent lower at $1,317.10 an ounce."The strong U.S. jobs data on Friday has pushed thesentiment towards risk-on trade," Think Markets' chief marketanalyst Naeem Aslam said.
"Investors like to get a bigger bang for their buck and goldisn't offering that. We think the support level of $1,300 is ofsignificant importance, and a break of this would send anegative signal for the traders."Money market traders stuck to bets that the Fed would raiseinterest rates three times this year after data released onFriday showed U.S. job growth recorded its biggest increase inmore than 1-1/2 years in February.Gold is highly sensitive to rising rates, which lift theopportunity cost of holding non-yielding bullion, while boostingthe dollar, in which it is priced.U.S. Treasury yields advanced after the jobs data, whilestock markets rallied as the numbers sparked a surge in riskappetite. That weighed on the dollar on Monday, though theimpact of the softer U.S. currency on gold was muted.Gold slipped to its lowest in a week on Friday after thepayrolls report, having come under pressure earlier in the weekafter failing to break through the $1,340 an ounce level for asecond time in two weeks.
"We are now getting within distance of the FOMC (FederalOpen Market Committee) meeting next week, with the rate hikebeing expected to be executed," Saxo Bank's head of commodityresearch Ole Hansen said.
"We've seen in the past that gold has been struggling aheadof these announcements, so I think we're just being sucked intothe slipstream of that meeting. That's raising the risk thatgold could be a bit more on the defensive."Speculators raised their net long position in gold by 4,178contracts to 161,812 contracts in the week to March 6, CommodityFutures Trading Commission (CFTC) data showed. Among other precious metals, silver was down 0.8percent at $16.46 an ounce. Palladium was 1.3 percentlower at $983 an ounce, while platinum was down 0.6percent at $958.70 an ounce. (Additional reporting by Eileen Soreng in BengaluruEditing by Louise Heavens and Adrian Croft)
Messaging: jan.harvey.thomsonreuters.com@reuters.net; Twitter: Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.