Gold futures on the COMEX division of the New York Mercantile Exchange fell on Friday after the release of the U.S. employment report. The most active gold contract for December delivery fell 1.1 U.S. dollars, or 0.09 percent, to settle at 1,251.9 dollars per ounce.
Analysts note that the prospect for a U.S. Federal Reserve rate hike was looming large before the release of this report, as investors had guessed that this would be an unexpectedly positive report based on the Institute for Supply Management' s report on Wednesday, and the jobless claims report on Thursday. However now that the report has come in exactly in-line with expectations, traders are unlikely to react strongly to this report.
As a result, investors believe the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting. According to the CME Group' s Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 10 percent for the November 2016 meeting, and 66 percent at the December meeting.
The U.S. Dollar Index fell by 0.01 percent to 96.67 as of 1845 GMT, putting pressure on the precious metal. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.
Wall Street and Main Street alike look for gold to recover next week after the more-than-5% drop that occurred this week.
Eighteen analysts and traders took part in a weekly Wall Street survey. Fourteen participants, or 78%, called for gold to rise next week. Three voters, or 17%, look for lower prices, while one, or 6%, sees gold sideways.
Meanwhile, 463 Main Street participants submitted votes in an online survey. A total of 264 respondents, or 57%, said they were bullish for the week ahead, while 137, or 30%, were bearish. The neutral votes totaled 62, or 13%.
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