Gold retreats from near 4-month peak on positive U.S. jobs data

(Reuters) – Gold prices slipped on Friday, retreating from a near-four month high, after robust U.S. jobs data fanned concerns that the Federal Reserve might stick with its aggressive monetary policy tightening.

Spot gold fell 0.4% to $1,794.96 per ounce by 2:21 p.m. ET (1921 GMT), after earlier hitting its highest since Aug. 10 at $1,804.46. U.S. gold futures settled down 0.3% at $1,809.6.

Data showed U.S. employers hired more workers than expected in November and raised wages despite mounting worries of a recession.

“With the U.S. jobs number coming in much stronger than expected… what we’re seeing is the concern that the Fed may need to go further with their expected interest rate hikes,” said David Meger, director of metals trading at High Ridge Future.

“You’re going to see pressure on most asset classes today, not just the precious metals complex.” [.N] [MKTS/GLOB]

The dollar edged 0.1% higher against its rivals, while benchmark U.S. Treasury yield rose. [USD/] [US/]

Additionally, Chicago Fed President Charles Evans stated at an event that there could be “a slightly higher peak rate of the funds rate, even as we likely will step down” the pace of rate hikes from 75 bps.

Fed funds futures prices still implied a 75% chance of the central bank raising its policy rate by 50 basis points to a 4.25%-4.5% range in mid-December.

Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion.

Gold prices were still set for their second straight weekly rise, up 2.2% so far this week, as the dollar dipped after Fed Chair Jerome Powell’s dovish speech this week.

Other precious metals were set for weekly gains as well. Spot silver rose 1.5% to $23.11 per ounce, having hit its highest since May 5. Platinum dropped 2.6% to $1,014.25 and palladium was down 2.1% to $1,901.25.