Gold prices fell on Friday as the dollar and US Treasury bond yields rose after a strong US non-farm payrolls report, which created uncertainty about when the central bank would start cutting interest rates.
Gold in spot transactions fell 0.9 percent to $2,035.59 per ounce.
But prices rose 0.6 percent within a week and settled above a pivotal level of $2,000 since the beginning of the year. Gold futures in the United States fell 0.9 percent to $2,052.40.
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The dollar index rose 0.67 percent, making bullion more expensive for buyers abroad than holders of other currencies. Benchmark 10-year bond yields also rose.
US employers added 353,000 jobs in January, exceeding economists’ expectations of 180,000 jobs. The strength of the economy and the strength of worker productivity have encouraged companies to hire and retain more workers, in a trend that may protect the economy from a recession this year.
The CME Group’s Fed Watch tool indicates that traders now expect about a 78 percent chance of a cut in US interest rates in May, compared to 92 percent before the data was released. Low interest rates enhance the attractiveness of the yellow metal, which does not generate a return.
US Central Bank Chairman Jerome Powell backed away from the idea of lowering interest rates in the spring, but expressed confidence in inflation trending toward the target range of two percent.
As for other precious metals, silver fell in spot transactions by 2.3 percent to $22.63 per ounce. Platinum fell 0.7 to 906.92, and palladium fell 0.6 percent to $956.53.
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The dollar jumped on Friday against a basket of major currencies after data showed that employers added more jobs than expected in January, which reduces the opportunity for the US Central Bank to cut interest rates soon.
Nonfarm payrolls rose by 353,000 jobs last month, exceeding economists’ expectations for an increase of 180,000, and average hourly wages rose 0.6 percent after rising 0.4 percent in December.
The dollar has declined in the past few days as US Treasury yields declined, despite Federal Reserve Chairman Jerome Powell’s comments on Wednesday that an interest rate cut in March was unlikely. Treasuries benefited from increased demand for safe haven investment as a result of renewed concerns about the financial health of US regional banks.
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The dollar index rose against a basket of currencies to 103.73 in the latest trading from 103 before the release of the jobs report, an increase of 0.67 percent since the beginning of the trading session.
The euro fell to $1.08065 from about 1.08830 earlier. The dollar rose to 147.86 yen from about 146.65 before the data was released.
2024-02-02 15:50:02
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