Gold Falls as U.S. Job Data Lowers Prospects of a Rate Reduce Strong U.S. jobs statistics supported the Federal Reserve's cautious approach on interest rate cuts and strengthened the currency, which caused gold prices to decline on Monday. However, losses were limited by underlying safe-haven demand due to uncertainty surrounding President-elect Donald Trump's policies. At …
Gold Falls as U.S. Job Data Lowers Prospects of a Rate Reduce
Strong U.S. jobs statistics supported the Federal Reserve’s cautious approach on interest rate cuts and strengthened the currency, which caused gold prices to decline on Monday. However, losses were limited by underlying safe-haven demand due to uncertainty surrounding President-elect Donald Trump’s policies.
At $2,679.30 an ounce, spot gold was down 0.4% from Friday’s nearly one-month highs. At $2,705, U.S. gold futures fell 0.4%.
Amid worries about inflation from possible import taxes under Trump, the U.S. jobs report confirmed the Fed’s cautious approach to policy easing this year, sending the dollar index to a two-year high.
Foreign buyers find the greenback-priced bullion more costly when the dollar appreciates.
Weekly unemployment claims, retail sales, the U.S. consumer price index (CPI), and the producer pricing index (PPI) are the main data that are coming this week. There are also other Fed officials expected to appear and provide additional information on the interest rate path.
In contrast to last week’s predictions of 40 basis points of easing, markets now forecast 25 basis points this year. Increased interest rates make the non-yielding asset less desirable.
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