Gold headed lower as the US non-farm payrolls number for July was much stronger than forecast.
The US economy added 255,000 jobs last month according to the survey, compared to expectations of 180,000, an improvement that brought the prospect of a US rate rise into focus again.
June saw 292,000 jobs added, though the rate of unemployment was unchanged at 4.9% in both months.
Spot gold shed US$23 on the July number, to US US$1,338, giving back much of the gains seen this week that had been sparked central bank loosening strategies.
The Bank of England became the latest central bank to lower its domestic interest rates, to 0.25%, though governor Mark Carney ruled out a move into negative rate territory.
The metal had hit a three year high as investors looked for safe havens for their money in face of depreciating paper currencies.
Relaxed monetary policies were cited this week by the World Gold Council as a reason for the surge in investment demand this year that has pushed the metal back up to three-year highs.
Barclays’ investment bank arm also spelt out just how significant this has been and predicted demand for gold and other precious metal backed exchange traded funds/products would hit record levels this year.
“Precious metals and gold in particular, have been the most favored commodity sector, attracting heavy inflows via ETPs, and so far 2016 is shaping up to be the best year ever for inflows to this type of product,” the bank said.
Inflows were US$4bn, US$5.5bn and US$1.6bn for May, June and July, respectively, the bank said.
“Gold ETPs inflows picked up along with prices from May. Uncertainly from Brexit further spurred safe-haven demand in June and July.”
Inflows so far this year so far of US$26.8bn have already outstripped the two previous best years at this stage, said Barclays, which were S$23.3bn in 2009 and US$20.2bn for 2010.
“This will mean a new full-year record, assuming there are not now big inflows in the remaining months of 2016.”
A couple of hours into trading in the US Friday, gold was a few dollars up on a week earlier.