LONDON: Gold slid to a two-month low on Wednesday after forecast-beating US jobs data stoked speculation that the Federal Reserve would move ahead with plans to raise interest rates, propelling the dollar index to its highest in three weeks.

The dollar rose after a report by a payrolls processor showed US private employers added 177,000 jobs in August, above economists’ forecasts.

Spot gold fell to its lowest since June 24 at $1,304.91 an ounce and was $1,309.60 an ounce at 1400 GMT, down 0.1 per cent.

The metal is heading for a 2.8pc drop in August. US gold futures were down $4.10 at $1,312.40. Technical selling, US dollar strength and rate hike speculation have been behind gold’s weakness on Wednesday, Commerzbank analyst Carsten Fritsch said, adding that gold is now closing in on support at the psychologically key $1,300 level.

“The last time gold traded below $1,300 an ounce was on the day after the Brexit referendum,” he said. The precious metal surged 5pc in a single day after Britain voted to leave the European Union in late June, subsequently hitting more than two-year highs.

Silver was up 0.5pc at $18.66 an ounce.

Platinum was 0.1pc higher at $1,052.80, having earlier touched an eight-week low of $1,047.35. Palladium was down 0.2pc at $676.20.

Published in Dawn September 1st, 2016