Gold prices fell more than 1% in the session on Friday and are heading for a weekly decline, after the US positive jobs report weakened expectations of the Fed cutting interest rates next month.
Spot gold prices fell 0.7% to $4,047.14 an ounce at 09:00 GMT, after losing more than 1% at one point in the session. Overall for the week, the precious metal fell 0.5%.
US December gold contract fell 0.4% to $4,044.50/ounce.
Mr. Nitesh Shah, commodity strategist at WisdomTree, said: "The prospect of further interest rate cuts is almost extinguished by the quite positive labor market data just released yesterday. I think this is the main factor that puts pressure on gold prices".
A contrasting picture from the US labor market
The US employment report released late on Thursday shows a mixed picture: non-farm payrolls increased by 119,000%, much higher than the forecast of 50,000, while the unemployment rate increased to a four-year high.
The next jobs report will only be released after the Fed's December meeting, at which traders now rate only 33% of the possibility of the Fed cutting interest rates, down from 44% last week.
Fed President Cleveland Beth Hammack, who opposed the Fed's latest interest rate cut, warned on Thursday not to continue cutting borrowing costs amid persistent inflationary pressures.
Meanwhile, physical demand for gold in major Asian markets this week remains weak, as interest rate fluctuations make potential buyers cautious.
The foundation is still solid
However, the fundamental factors of gold are still maintained. Factors such as slowing economic growth, high stock market valuations, geopolitical instability and the trend of diversification from US assets will continue to support strong investment demand and purchasing activities of central banks, ANZ said in a report.
WisdomTree's Shah added: "I think gold prices have hit rock bottom. Prices may decrease slightly in the short term, but in general, the trend in the coming months will be to increase".
In other markets, spot silver prices fell 2.1% to $49.55 an ounce; platinum prices rose 0.2% to $1,525.25 an ounce; and palladium fell 0.2% to $1,375 an ounce.
