By Yuliya Fedorinova and Ranjeetha Pakiam
Gold fell to the lowest level in a week after Friday’s U.S. jobs report showed strength in the labor market and raised bets the Federal Reserve will boost interest rates this year.
Bullion for immediate delivery fell 0.3 percent to $1,331.56 an ounce, after touching the lowest price since July 29, as of 9:40 a.m. in London, according to Bloomberg generic pricing. The metal lost 1.9 percent on Friday, the biggest drop since May 9.
Gold has rallied 25 percent this year as investors turn to the metal as a store of value amid weak or negative interest rates across major economies. The Fed may be gearing up for a second rate hike after payrolls climbed by 255,000, exceeding all forecasts in a Bloomberg survey of 89 economists and following a 292,000 gain in June.
The probability of the Fed raising borrowing costs in December climbed to 47 percent, from 37 percent on Aug. 4, Fed-fund futures data compiled by Bloomberg show. That contrasts with the Bank of England’s cut in rates last week for the first time since 2009.