Gold opened the week
down on Monday, trading close to a 5-1/2-year low, as the U.S. dollar
firmed after solid U.S. job gains in July suggested the Federal Reserve
could raise interest rates as early as next month.
Spot gold had dropped
0.2 percent to $1,090.25 an ounce by 0041 GMT. The metal fell for a
seventh week in a row last week, its longest such retreat since 1999,
having struggled to pull away from a 5-1/2-year trough of $1,077 reached
during a late rout in July.
U.S. gold for December delivery fell 0.4 percent to $1,089.70 an ounce.
U.S. nonfarm payrolls
increased 215,000 in July and wages rebounded after a surprise stall in
the prior month, signs of an improving economy that opened the door
wider to a U.S. interest rate increase next month. The unemployment rate
held at a seven-year low of 5.3 percent.
Payrolls data for May
and June was revised to show 14,000 more jobs created than previously
reported, and analysts say the report "easily clears the hurdle needed
to keep the Fed on track for a September rate hike".
A looming U.S. rate rise, the first since 2006, had weighed on non-interest yielding gold, pulling more funds to the dollar.
Top gold consumer
China is under growing pressure to further stimulate its economy after
disappointing data over the weekend showed another heavy fall in
factory-gate prices and a surprise slump in exports.
China's foreign
exchange reserves, the world's largest, fell by $42.5 billion in July to
$3.65 trillion, the sharpest monthly drop since March amid signs of
capital outflows. The value of China's gold reserves dropped to $59.24
billion from $62.4 billion.
The decline in
holdings of SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, continued, hitting 21.47 million ounces on Friday,
the lowest since September 2008.
The South African
Chamber of Mines said all unions representing workers in the gold sector
have rejected the final wage increase offer from bullion producers,
setting the stage for protracted negotiations.
Source: Reuters
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