US Labor Data undermines Gold

Gold fell to a near two-week low after the US unemployment rate fell to the lowest level in seven years, raising expectations the Federal Reserve will raise interest rates this month. The Fed is still weighing whether the US economy is strong enough to withstand monetary tightening or rising interest rates. As for gold, monetary tightening means a decrease in the appeal, due to the gold does not yield.

Data from the US Labor Department showed non-farm payrolls in August amounted to 173,000, lower than economists' expectations of 220,000. As for the data in July was revised up to 245,000 from the initial release of 215,000. The unemployment rate fell to 5.1% reported in August, the lowest level since April 2008. The same report shows the average salary rose higher than expected.

Fed Funds futures showed the Fed rate hike chances in September by 34%, higher than before the US employment data released at the level of 27%, but lower than the month with the opportunity to reach 50%.

Gold in Friday's trading ended at the level of $ 1121.97 per troy ounce, with daily highs $ 1132.15, $ 1116.72 and the lowest.