(Reuters) - Gold prices dipped more than 2% on Friday as investors’ hopes of a rebound in the global economy got a boost from stronger-than-expected U.S. non-farm payrolls data, reducing demand for safe havens.
Spot gold slid 2% to $1,675.70 per ounce at 11:08 a.m. ET (1508 GMT). U.S. gold futures fell 2.8% to $1,678.40.
Bullion has declined about 3% so far this week, on track for its biggest fall since the week ending March 13.
“We had significantly stronger-than-expected U.S. payroll numbers - an increase of 2.5 million versus an expectation of a decline of 7.5 million - that 10-million swing has brought forward expectations of the economic recovery in the United States,” said Bart Melek, head of commodity strategies at TD Securities.
Gold was also being pressured by stronger yields and a slightly firmer dollar, “meaning the opportunity cost to hold gold in the portfolio has gone up,” Melek added.
Wall Street jumped as the latest data from the United States showed a drastic fall in the unemployment rate to 13.3% in May from 14.7% in April as layoffs abated.
The data comes ahead of a two-day policy meeting of the U.S. Federal Reserve next week. The central bank has injected massive stimulus and cut interest rates to near zero to cushion the blow from the coronavirus pandemic.
However, “we’ve still got economic uncertainty, trade tensions, problems in the (United) States ... for the longer term, the influences are definitely more positive (for gold) than negative,” said INTL FCStone analyst Rhona O’Connell.
Elsewhere, palladium edged higher by 0.2% to $1,937.20 per ounce, while platinum dropped 3.6% to $806.45.
Silver slipped 2.4% to $17.29 per ounce, and was set for its first weekly decline in five.
Reporting by Asha Sistla and Eileen Soreng in Bengaluru; Editing by Nick Zieminski and Andrea Ricci