Gold futures fell on pre-holiday profit-taking Friday morning, after the dollar shot up on relief that the economy created almost as many jobs as predicted in August.
Traders also had other reasons to cash in long positions early. The Republican Nation Convention concluded Thursday night without major disruptions or extremist attacks and metals trade was to wrap up early at midday in advance of Monday's US Labour Day holiday.
December gold initially fell $4, then bounced, then fell again after the Labour Department reported the US unemployment rate fell to 5.4 percent in August, the lowest since October 2001, and non-farm payrolls rose 144,000.
At 9:30 am EDT (1330 GMT), the contract was down $4.50 at $403.50, having reached $402.20 from a $408.70 peak before the jobs numbers. Economists had predicted a 150,000 payrolls increase, but also saw a higher 5.5 percent jobless rate. So financial markets concluded that nothing stands in the way of the Federal Reserve raising interest rates another quarter percentage point at its next meeting September 21.
"The payroll number came out right in line, the euro went down, that's why we went down," said a floor broker.
Spot gold was quoted $401.15/1.90, down from the close at $405.80/6. London's morning fix was $405.80.
December silver, was down 9.0 cents at $6.72 an ounce, trading from $6.83 to $6.67. Spot silver fetched $6.66/69, down from $6.74/77. The fix was at $6.7125. October platinum was off $6 at $864 an ounce. Spot fetched $861.00/865.00. December palladium was unchanged at $214 an ounce. Spot palladium was at $210.00/215.00.
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