Gold Declines as Dollar Rebounds After U.S. Jobless Rate Drops

Aug. 7 (Bloomberg) -- Gold fell for the third straight day as an unexpected drop in U.S. unemployment drove the dollar higher, damping the appeal of the precious metal as an alternative investment. Silver rose.

The dollar gained as much as 1.3 percent against a basket of six major currencies. The jobless rate in June fell to 9.4 percent, the first decline since April 2008. Economists forecast an increase to 9.6 percent.

“The jobless numbers offered up a bit of a surprise,” Jon Nadler, a senior analyst at Kitco Inc. in Montreal, said in a note. “The jobs news cannot be interpreted as dollar-negative, no matter what anyone says.”

Gold futures for December delivery fell $3.40, or 0.4 percent, to $959.50 an ounce on the Comex division of the New York Mercantile Exchange. The metal dropped by the same amount in each of the previous two days. The price gained 0.4 percent this week.

Bullion for immediate delivery dropped $8.52, or 0.9 percent, to $954.73 at 2:39 p.m. New York time.

Gold may advance next week as investors seek an alternative to the dollar, according to a Bloomberg News survey. On Aug. 5, the dollar touched an 11-month low against the currency basket. Eleven of 20 traders, investors and analysts said bullion would gain. Five forecast lower prices and four were neutral.

Silver for September delivery rose 2.3 cents, or 0.2 percent, to $14.668 an ounce in New York. The metal rose 5.2 percent this week.