02:00 PM EDT, 10/04/2024 (MT Newswires) -- (Updates prices.)

Gold traded down midafternoon on Friday, moving sharply lower as the dollar and yields jumped after the United States reported a much larger than expected rise in new jobs last month.

Gold for December delivery was last seen down US$10.50 to US$2,668.70 per ounce.

The U.S. Bureau of Labor Statistics reported U.S. nonfarm payrolls rose by 254,000 new positions in September, up from 159,000 a month earlier and well ahead of the consensus estimate for a rise of 150,000, according to Marketwatch. The unemployment rate, expected to remain steady at 4.2%, fell to 4.1%.

The report shows the U.S. labor market remains solid, which could affect the course of future interest-rate cuts from the Federal Reserve, which pointed to a weakening labor market as a reason for its first cut to rates in four years last month.

"While the headline payroll number and unemployment rate reading erase the possibility of a 50 basis point cut from the Fed in November, the average hourly earnings data shouldn't deter central bankers from continuing to normalize interest rates," Royce Mendes, Head of Macro Strategy at Desjardins Capital Markets, noted.

The dollar was sharply higher following the data. The ICE dollar index was last seen up 0.57 points to 102.56.

Treasury yields also spiked on the report, bearish for gold since it offers no interest. The U.S. two-year note was last seen paying 3.913%, up 19.7 basis points, while the yield on the 10-year note was up 10.0 points to 3.952%.