Gold ticked up after an eight-day losing streak on Monday, but languished near its lowest in three months as surging US nonfarm payrolls boosted expectations of a December rate hike in the United States. Employers outside the farming sector added 271,000 jobs in October, the most in 10 months, and the jobless rate fell to a 7-1/2-year low of 5 percent, data on Friday showed. Economists had forecast nonfarm payrolls increasing 180,000 and the unemployment rate remaining at 5.1 percent.
As investors increased bets that the first rate increase in nearly a decade will come next month, they sent non-interest-paying gold tumbling to $1,084.90 an ounce on Friday, the lowest since August. Spot gold rose 0.5 percent to $1,093.51 an ounce by 0639 GMT on short covering.
"Further downwards pressure is expected on the precious complex in the lead up to the December FOMC meeting," MKS Group trader Sam Laughlin said, referring to the Fed's Federal Open Market Committee. "A recovery towards $1,100 isn't out of the question, however, expect to see offers capping a run higher at this level," he said.
Following the jobs report, futures markets were pricing in a 70 percent probability of a December rate hike, up from 58 percent before the data. Assets in SPDR Gold Trust, the top gold-backed exchange-traded fund, fell 0.40 percent to 669.09 tonnes on Friday, the lowest in nearly three months, as investors exited bullion.
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