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PRECIOUS-Gold falls after robust U.S. jobs report boosts risk sentiment

Published 04/04/2016, 08:18 pm
Updated 04/04/2016, 08:20 pm
© Reuters.  PRECIOUS-Gold falls after robust U.S. jobs report boosts risk sentiment
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* Gold falls for second straight session

* Could decline below $1,200/oz -analyst

* SPDR assets drop, speculators raise bullish positions (Updates throughout, changes dateline from SINGAPORE)

By Clara Denina

LONDON, April 4 (Reuters) - Gold fell on Monday after a strong U.S. labour report boosted investor risk sentiment and the dollar stabilised, while uncertainty continued about the Federal Reserve's interest rates path.

Spot gold XAU= eased 0.6 percent to $1,215.13 an ounce by 0952 GMT, while U.S. gold for June delivery GCcv1 slipped 0.4 percent to $1,218.20 an ounce.

Spot prices saw their biggest quarterly rise in nearly 30 years in the three months to March, rallying more than 16 percent on speculation the Fed was not in a hurry to normalize interest rates, but drifted back towards the key $1,200 level after hawkish comments from several Fed officials.

The U.S. central bank raised rates in December for the first time in nearly a decade.

"The Fed is still concerned about the global economic growth and the pace of interest rates increases will be gradual," ETF Securities' strategist Edith Southammakosane said.

"The FOMC minutes this Wednesday could provide a better idea of when the Fed plans the next rate hike."

The minutes from the Fed's March 15 to 16 Federal Open Market Committee meeting will be released on Wednesday.

The metal is highly exposed to rising rates, which lift the opportunity cost of holding non-yielding assets, while boosting the dollar.

Gold could fall below $1,200 soon and test key double-bottom support at around $1,170 to $1,175, INTL FCStone said in a note.

"We could see the markets start coalescing around expectations that the Fed will now put a rate increase back on the table, perhaps for some time in May or June," it added.

Data on Friday showed non-farm payrolls rose by 215,000 last month, higher than expectations of 205,000, underscoring the strength in the U.S. economy. interest rate futures suggested traders are now betting the Fed will next raise rates as soon as November, versus December ahead of the report. Wall Street's top banks held firm to their expectation for a rate hike in June, according to a Reuters survey conducted on Friday. the near term, support for gold sits around $1,215 and below this at $1,210, MKS Group said in a note.

Investor positioning in gold is largely bullish. Hedge funds and money managers boosted their bullish bet in gold in the week to March 29, to the highest since the end of 2012, U.S. Commodity Futures Trading Commission data showed on Friday. in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.15 percent to 818.09 tonnes on Friday, but remain near the highest in over two years.

Silver =XAG lost 0.3 percent to $14.98, platinum XPT= slipped 0.2 percent to $952.40 and palladium XPD= fell 1.2 percent to $558.60.

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