Picture: THINKSTOCK
Picture: THINKSTOCK

LONDON — Gold fell from an 11-month high hit earlier on Friday after the number of US jobless fell to the lowest in nearly four years, but prices steadied at lower levels as the employment data was not seen altering a low interest rate environment.

The US Bureau of Labour Statistics reported on Friday that 114,000 workers were added to nonfarm payrolls in September.

Analysts polled by Reuters had forecast a rise of 113,000 workers.

Spot gold dipped to $1,778.10/oz after the data, having earlier touched an 11-month high above $1,795.

Prices later trimmed losses to $1,783.59 by 13.39pm GMT, down 0.3% on the day.

US gold futures were down 0.7% at $1,784.60.

Analysts said the data showed the US economy, the world’s largest, was not heading back into a recession, and had encouraged investors to take on riskier bets with stock markets rising.

"I think generally the data was quite positive for risk appetite so we may have seen some safe haven buying coming out of gold," said Standard Chartered analyst Daniel Smith.

The impact is expected to be muted however thanks to the very low interest rate environment created by major central banks, which have moved to make monetary policy more accommodative, boosting the metal’s appeal as an inflation hedge.

The Federal Reserve’s decision to embark on a third round of quantitative easing was a trigger for gold’s 10% rally in the third quarter.

"I think there are some good perspectives for gold going forward given that we’ve had promises from major central banks to keep interest rates low for a very long time," said Christen Tuxen at Danske Bank.

The European Central Bank kept interest rates unchanged on Thursday and said it was ready to buy more government bonds from debt-laden nations, as risks to growth remained.

Exchange-traded funds backed by physical gold increased their holdings of the metal, adding another 418,611 ounces on October 4. SPDR Gold Trust, the world’s largest gold ETF, reported record holdings of 1,333.44 tons of bullion on Thursday.

South African strikes intensify

Gold priced in rand hit a record high at R15,366.38/oz on Friday, as labour unrest continued to grip Africa’s biggest economy. The South African currency fell 1.2% against the dollar earlier in the day.

Anglo American Platinum (Amplats), the world’s top producer of platinum, said on Friday it had fired 12,000 workers who had participated in a three-week illegal strike. Amplats said the industrial action had cost it 39,000 ounces in lost output, which accounted for R700m in revenue.

The unrest has spread across other industries in South Africa. Oil-producer Shell declared force majeure on fuel deliveries on Friday. Force majeure is a measure that allows a company to sidestep its contractual obligations due to events beyond its control.

However, the strikes in South Africa, accounting for 80% of the world’s platinum reserves, failed to support prices among the platinum group metals.

Spot platinum was up 0.1% on the day at $1,709.49/oz, after reaching a seven-month high earlier in the session. The metal was heading for its ninth session of gains and a weekly rise of 2.8%.

Spot palladium was down 0.9% to $662.47/oz and silver drifted lower, with spot prices down 0.5% at $34.80/oz.

Reuters