Washington, DC, April 10 (BNA): Gold prices fell 1% to fall below $2,000 on Monday, after US employment data indicated a tight labor market, raising expectations of another rate hike by the Federal Reserve in May. .
Spot gold was down 0.8% at $1,992.97 an ounce as of 0613 GMT. US gold futures fell 0.9 percent to $20,007.80.
Harish V, Head of Commodity Research at Geojit Financial Services, said that gold fell due to “profit taking on expectations of a rate hike by the Federal Reserve, followed by the strong job growth report in the US on Friday and the stability of the dollar,” while pointing to a technical correction in the market. the prices. mentioned.
The dollar index gained 0.1%, making bullion too expensive for overseas buyers.
Data on Friday from the US Labor Department showed non-farm payrolls increased by 236,000 jobs in March, against expectations of 239,000. The data also showed that the unemployment rate fell to 3.5% from 3.6% in the previous month.
The report raised bets that the US central bank will raise interest rates next month, with markets pricing in a 63.4% chance of a 25 basis point hike, according to the CME FedWatch tool.
“The short-term outlook for gold remains bullish. As long as prices remain above $1,920, there are chances that the bullish outlook will continue,” added Harish of Geojit.
Gold is traditionally considered a hedge against inflation, but higher rates increase the opportunity cost of holding a non-yielding asset.
“The bullish trend, which has been established since November 2022, remains intact,” metals firm MKS PAMP said in a note, adding that Wednesday’s “more stable” core CPI will boost 25 basis points higher and ensure that unless there is a new catalyst, Gold prices may not reach an all-time high this month.
Spot silver fell 1% at $24.75 an ounce, platinum lost 0.7% to $1,000.78 and palladium fell 0.1% to $1,464.79.
Australia, Hong Kong and European markets are closed on Mondays for the Easter weekend.
WWA