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Gold Prices Still Fall After Disappointing Jobs Report

October 7, 2016 at 17:07 by Andrew Moran

October may continue to be the worst month for gold.

Gold prices cannot seem to catch a break this week. Even after a weaker US September jobs report, the yellow metal could not take advantage of the employment numbers and make any gains.

December gold futures declined $2.00, or 0.16%, to $1,251.00 per ounce at 16:27 GMT on Friday. The yellow metal has been trading in negative territory for the entire trading week and has shed 5% of its value. Gold has fallen for eight consecutive sessions. It has not traded this low since early June.

Silver has also suffered losses. December silver futures tumbled $0.06, or 0.35%, to $17.28 an ounce. Silver is trading at its lowest level since the beginning of June.

According to the Bureau of Labor Statistics (BLS), the US economy added 156,000 new jobs in September. This is lower than the 176,000 new jobs that economists had projected last month. The unemployment rate also rose to 5%.

Over the past three months, job gains have averaged 192,000 per month.

This disappointing jobs report could impact the Federal Reserve‘s decision to raise interest rates in December. Although the labor report provides mixed signals for investors, the Federal Open Market Committee (FOMC) may pause on a rate hike in a couple of months if the upcoming jobs numbers continue to be lower than initially expected.

Gold is sensitive to rising rates as the yellow metal does not provide investors with any yield. With the US dollar strengthening, it also makes gold become more expensive for foreign investors.

The third-quarter gross domestic product (GDP), the US presidential election, and October’s jobs report will be key for both investors and the US central bank in December. The FOMC will meet on November 1 and 2 and December 13 and 14.

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