Gold fell sharply today, shedding US$20 in less than two hours after non-farm payrolls data from the US Department of Labor beat expectations, showing a gain of 216,000. The unemployment rate declined from 8.9 percent to 8.8 percent, suggesting that the economic recovery is gaining speed.
The upbeat jobs report prompted investors to opt for riskier assets and shun gold, which is used for wealth protection.
It has now become more likely that the Federal Reserve will revisit its monetary policy, which could include hiking interest rates sooner than expected. This would hurt gold’s appeal as an inflation hedge.
Gold last traded at US$1,415/oz.
Silver and platinum retreated to US$37.19/oz and US$1,758/oz respectively.
Randgold Resources (LON:RRS) led the miners, climbing 3%. Lonmin (LON:LMI) added just over 1%.
Fresnillo (LON:FRES) rose marginally and African Barrick Gold (LON:ABG) was sitting just below the opening level.
In the FTSE 250, Hochschild Mining (LON:HOC) slipped 4% and Petropavlovsk (LON:POG) dropped 2%. Aquarius Platinum (LON:AQP) did better, tacking on 1.3%.
Turkey and Saudi Arabia focused gold explorer KEFI Minerals (LON:KEFI) was among the top performers in the sector, soaring 14%.