Spot gold erases gains for the year as non-farm payroll data boosts expectations of a Fed rate hike.

Spot gold erased gains for the year as strong U.S. employment data boosted market bets on the Federal Reserve raising interest rates this year, which is unfavorable for this precious metal. After the latest U.S. data showed job growth in May exceeded all expectations, bond yields and the dollar rose, with spot gold prices falling 3.6% on Friday to $ 4,315.35 per ounce, giving up gains for the year. At a time when tensions in the Middle East are pushing up energy prices, strong performance in the labor market has reinforced market expectations for Fed officials to raise interest rates. Rate hikes are usually not favorable for non-interest-bearing assets such as gold. "Rising real yields and a strong dollar bring double resistance to gold," said Elias Haddad, global market strategist at Brown Brothers Harriman & Co. Haddad said that if gold prices fall below the widely watched long-term momentum indicator- the 200-day moving average, there would be further downside risks for gold prices.