Gold and other precious metals retreated today as the US dollar strengthened, curbing the yellow metal’s appeal as an alternative investment.
The American currency was in demand after the US Labor Department reported on Friday they US non-farm payrolls rose by 151,000 in October, which was a much larger gain than projected by analysts.
Economists polled by Dow Jones Newswires expected to see 60,000 jobs added during the previous month.
The US dollar slumped while gold rallied after the Federal Reserve announced a US$600 billion extension of its asset purchase programme last Wednesday in the latest attempt to spur the economic recovery.
The Fed is looking to drive up inflation to encourage Americans to spend more and create more jobs.
Friday’s jobs data showed that the unemployment rate remained at 9.6%.
Gold is seen as one of the main safe haven assets and an inflation hedge, which boosted its appeal in the aftermath of the Fed’s move.
Investors are increasingly pouring money into gold to protect wealth against inflation and risks associated with the effects the new round of quantitative easing will have on the economy.
Gold last traded at US$1,390/oz. Silver and platinum declined to US$26.75/oz and US$1,756/oz respectively.
Mining stocks were mixed today. In the FTSE 100, platinum producer Lonmin (LON:LMI) posted a small gain, as did Randgold Resources (LON:RRS), while fellow gold miner African Barrick Gold (LON:ABG) declined 1.6%.
Silver miner Fresnillo (LON:FRES) was down 1%.
Midcaps were in the red. Aquarius Platinum (LON:AQP) and silver producer Hochschild Mining (LON:HOC) declined 1.3% and 2.4% respectively.
Gold miner Petropavlovsk (LON:POG) was sitting just below the opening level.
AIM-listed gold producer with operations in Africa Goldplat (LON:GDP) was among the top performing small caps, rallying 10.5%. Diversified mining investment company Electrum Resources (LON:ECR), which holds an exclusive option over the Copper Flat project, followed, rising 10%.
Norseman Gold (LON:NGL), which operates Australia’s longest continuously running gold mining operation, and South Africa and Mozambique focused gold miner Pan African Resources (LON:PAF) added 8%.
Latin America focused gold producer and explorer Orosur Mining (LON:OMI) climbed 7.5%.