NEW YORK/LONDON, Sept 7 (Reuters) - Gold fell on Friday as
the dollar resumed its rally versus a currency basket after
stronger-than-expected payrolls data cemented expectations that
the Federal Reserve will raise interest rates in September, in
what would be its third hike this year. 
    A stronger dollar makes dollar-priced gold costlier for
non-U.S. investors.
    U.S. jobs growth accelerated in August, with wages notching
their largest annual increase in nine years, strengthening views
the economy was so far weathering the Trump administration's
escalating trade war with China.             
    Spot gold        fell 0.4 percent at $1,195.48 an ounce by
2:49 p.m. EDT (1849 GMT), and was on track to close the week
down 0.5 percent. 
    U.S. gold futures         settled down 0.3 percent at
$1,200.40 an ounce. 
    "The biggest jump in average hourly earnings this year
bashed bonds and drove the dollar higher, which was enough to
break gold’s two-day winning streak," said Tai Wong, head of
base and precious metals trading at BMO Capital Markets in New
    He noted that gold closed under $1,200 for the second time
in four weeks "as market ponders if wage pressures are finally
emerging, which may tip the Fed towards a December rate hike."
    The greenback has soared this year on escalating U.S.-Sino
trade tensions, though it has lost some steam this week to rival
safe-haven currencies like the yen and Swiss franc even as
investors brace for new U.S. tariffs on China.              
    "I'm struggling to (see) how the dollar could extend gains
from here. Other central banks are becoming hawkish, the pound
could come back up and the euro, once the ECB starts tightening.
Gold is due for a rally," Fawad Razaqzada, analyst at,
    An overnight report bolstered the yen after suggesting U.S.
President Donald Trump would next take up trade issues with
Japan, indicating possible headwinds for the dollar.
    Battered emerging market currencies                 have
also recovered their poise versus the dollar. 
    "The stronger yen versus the dollar is leading to some
buying in gold. ... The recent low of around $1,160 in August is
really the bottom in gold for now," said Yuichi Ikemizu, Tokyo
branch manager, ICBC Standard Bank.
    Spot silver        was up 0.2 percent at $14.15 per ounce,
while palladium        rose 0.6 percent to $979.40, after
tapping the highest level since June 19 at $990.
    Platinum        fell 1.6 percent to $778.49.
    The global platinum market will be oversupplied by 295,000
ounces this year as both supply and demand of the autocatalyst
metal fall by 2 percent, the World Platinum Investment Council
(WPIC) said on Thursday.