* U.S. non-farm payrolls data beats expectations
* Dollar rises to 7-week high against currency basket
* Indian gold buying picked up as prices retreated
By David Brough
LONDON, Nov 2 Gold prices fell to their lowest
level since late August on Friday, sliding more than 1 percent
as the dollar jumped after better-than-expected U.S. jobs data
in the last major signal on the state of the economy before
elections next Tuesday.
Payrolls data showed employers added 171,000 jobs in October
versus forecasts of 125,000, while the jobless rate met
expectations at 7.9 percent.
The dollar, having already hit a seven-week high in
the run-up to the data, extended gains against the euro,
helping push gold through key resistance levels.
Spot gold was down 1.8 percent at $1,684.36 at 1509
GMT, having earlier hit an eight-week low of $1,682.89. It is on
track to post its biggest one-day fall since mid-June.
U.S. gold futures for December fell $29.90 an ounce
"The dollar got a boost on the upside, and so gold saw some
long liquidation and some stops were hit," said Afshin Nabavi,
head of trading at MKS Finance.
"Ahead of the U.S. election the market will be nervous and
undecided, so we should have volatile trading until Wednesday
morning," he said.
In the longer term, a positive reading on jobs could weigh
on gold if it trims expectations for monetary easing.
The U.S. authorities have explicitly tied the extent of
monetary stimulus measures - news of which sent gold above
$1,795 an ounce in October - to the health of the jobs market.
Looser monetary policy stokes longer-term inflationary fears
and maintains pressure on interest rates, both good for gold.
However, while the data was good, analysts say it is far
from a level that would yet stoke fears of an imminent reversal
of the Fed's commitment to easing.
"When you dig deeper into it, it's still not a robust number
by any means," Charles Schwab fixed income strategist Kathy
Jones said. "We're way short of where we need to be to bring
down the unemployment rate to where the Fed would like to see,
closer to 6 percent than 8 percent."
SUPPORT SEEN AT $1,693
On the physical markets, gold importers in India,
historically the world's biggest gold consumer, rushed to stock
up ahead of major festivals after prices of the metal fell to
their lowest in nearly a month.
India is approaching the height of its festival season, with
the Diwali and Dhanteras later this month. Gold is a key part of
gifts and is used for dowries at weddings, which are popular at
this time of year.
Buyers are likely to welcome gold's fall, which has
pressured India's benchmark gold contract to its lowest
since Aug. 23 at 30,527 rupees per 10 grams.
Data released by the Istanbul Gold Exchange on Friday showed
Turkey's gold imports fell to 3.7 tonnes in October from 7.49
tonnes a year earlier, and 3.84 tonnes in September.
In South Africa, AngloGold Ashanti suspended
operations at one of its mines on Friday, a sign that labour
tensions continue to bubble in the sector despite the official
resolution of weeks of wildcat walkouts.
Platinum and palladium were still set to eke out their first
weekly gains after three weeks of straight falls, although spot
platinum fell 1.4 percent to $1,542.49 and spot palladium
fell 2.1 percent to $597.90.
October auto sales data pointed to still-sluggish car
demand, curbing consumption expectations for platinum and
palladium, which are chiefly used in catalytic converters.
France posted its twelfth straight monthly fall in new car
registrations on Friday, while German new car registrations rose
by slightly more than 1 percent in October, having slumped 11
percent in September, according to a source.
Silver was down 2.8 percent at $31.30 an ounce,
having also hit a two-month low at $31.14.