Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold dropped1.8% to close under $1,193, its first sub-$1,200 finish since last December, after strong jobs data boosted speculation that the Fed will raise interest rates by mid-2015. Risk appetite surged, with the Dow added 1.3%, as investors shifted away from safe havens.

The September U.S. non-farm payrolls showed 248,000 jobs added last month, handily beating forecasts, with July and August totals revised higher by nearly 60,000. The unemployment rate fell to 5.9%, the lowest since 2008, in part because the labor-force participation rate fell again to a multi-decade low, meaning more of the long-term unemployed have stopped looking for work.

The dollar surged 1% after the jobs release, hitting a 25-month high against the euro. A rising dollar weighs on gold and other commodities denominated in it for international trade by making them more expensive to users of other currencies.

Despite its topline strength, the report contained data that may keep the Fed from raising rates any earlier. Wage-growth was stagnant in September and up merely 2% over the past twelve months. Without higher earnings consumer spending will remain stagnant, undermining growth. And inflation remains stuck at 1.5% by the Fed's preferred measure, the personal consumption expenditures price index, far below the target of 2%.

The other metals also lost ground, with silver dropping 1%. Platinum tumbled 3% to a five-year low, and palladium lost 1.5%.

At the Comex close: gold dropped 22.20 to $1,192.90; December silver lost 17 cents to $16.88; October platinum tumbled $37.62 to $1,216.40; and palladium lost $11.45 to $754.55 an ounce