Investing.com - Gold futures slumped to the lowest level in more than two weeks on Friday, as traders continued to mull the timing of a Federal Reserve rate hike following the release of solid U.S. nonfarm payrolls data.
The Labor Department reported that the U.S. economy added 173,000 jobs last month, below forecasts for an increase of 220,000 and slowing from gains of 245,000 a month earlier.
However, the unemployment rate dropped from 5.3% to 5.1%, better than expectations for 5.2% and the lowest since April 2008.
Hourly earnings, a component of the jobs report that the Federal Reserve has said must rise, ticked up 0.3%, above forecasts for a 0.2% increase and following a gain of 0.2% in the previous month.
The data did little to alter expectations for a rate hike at the Federal Reserve's next meeting due to take place September 16-17.
Richmond Fed President Jeffrey Lacker said on Friday that the U.S. economy no longer needs interest rates near zero, fueling further speculation over a possible rate hike as soon as this month.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Gold for December delivery on the Comex division of the New York Mercantile Exchange dropped $3.10, or 0.28%, to end Friday's session at $1,121.40 a troy ounce after falling to an intraday low of $1,115.70, the weakest level since August 18. U.S. markets will be closed on Monday for the Labor Day holiday.
For the week, prices of the precious metal dropped $10.50, or 1.1%, the second straight weekly loss.
Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates in September for the first time since 2006.
Also on the Comex, silver futures for September delivery declined 15.8 cents, or 1.07%, on Friday to settle at $14.54 a troy ounce by close of trade. On the week, silver futures inched up 3.4 cents, or 0.06%.
Elsewhere in metals trading, copper for December delivery sank 7.2 cents, or 3.04%, on Friday to settle at $2.312 a pound as fears of a China-led global economic slowdown spooked traders and rattled sentiment.
The European Central Bank lowered its forecast for growth and inflation, citing oil prices and slowing growth in China, on Thursday and indicated that it could expand its quantitative easing program amid increased downside risks to its inflation outlook.
For the week, copper prices lost 1.7 cents, or 1.11%, as investors continued to fret over the health of China's economy.
Prices of the red metal sank to a six-year low of $2.202 on August 24 as concerns over slowing growth in China and steep declines on Chinese stock markets dampened appetite for the red metal.
Chinese stock markets were closed on Thursday and Friday for the World War Two Victory Day parade and will reopen Monday.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
In the week ahead, investors will be looking ahead to Friday’s U.S. reports on producer prices and consumer sentiment for further indications on the strength of the economy and the likelihood of a near-term interest rate hike.
Markets will also be watching a raft of Chinese economic data, including a report on the trade balance as well as data on consumer price inflation.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 7
Markets in the U.S. are to remain closed for the Labor Day holiday.
Tuesday, September 8
China is to release data on the trade balance.
Wednesday, September 9
The Bank of Canada is to announce its benchmark interest rate and publish its rate statement.
Thursday, September 10
The Reserve Bank of New Zealand is to announce its benchmark interest rate and publish its rate statement.
China is to release figures on consumer and producer price inflation.
The Bank of England is to announce its benchmark interest rate and publish its rate statement.
The U.S. is to release data on initial jobless claims.
Friday, September 11
The U.S. is to round up the week with data on producer prices and consumer sentiment.