Gold moves lower in wake of strong U.S. jobs, GDP growth reports

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Investing.com - " Gold prices carried Friday's losses into Monday after better-than-expected U.S. jobs and growth data fueled demand for the dollar by fanning expectations for the Federal Reserve to begin scaling backs monetary stimulus programs in the near future.

Gold and the dollar trade inversely with one another.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,281.30 during U.S. afternoon hours, down 0.26%.

Gold prices hit a session low of USD1,278.50 a troy ounce and high of USD1,288.40 a troy ounce.

Gold futures were likely to find support at USD1,251.10 a troy ounce, the low from Oct. 15, and resistance at USD1,325.70, Thursday's high.

The December contract settled down 1.83% at USD1,284.60 a troy ounce on Friday.

On Friday, the Bureau of Labor Statistics reported that the U.S. economy added 204,000 jobs in October, far surpassing expectations for a 125,000 increase.

A day earlier, official data showed that the U.S. economy grew 2.8% on year in the third quarter, well beyond expectations for 2.0% growth.

The figures fueled market sentiments that the Federal Reserve could soon announce plans to scale back its USD85 billion in monthly asset purchases, which drive down borrowing costs to spur recovery, weakening the greenback and boosting gold prices as side effects.

The dollar fell after profit taking kicked in on Monday, especially after investors concluded that the Fed may likely leave its stimulus policies unchanged at least until Jane Yellen takes the helm of the U.S. central bank and holds her first policy meeting in March.

Further fueling profit taking were concerns that fewer high-quality jobs are being created when compared to retail, leisure and hospitality jobs.

Still, gold remained in negative territory on sentiments that the days of ultra-loose monetary policies that have bolstered the precious metal since the 2008 financial crisis will end soon.

Elsewhere on the Comex, silver for December delivery was down 0.07% at USD21.303 a troy ounce, while copper for December delivery was up 0.16% and trading at USD3.259 a pound.








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This article appears in: Investing , Forex and Currencies

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