Gold Drops 1% as Robust US Jobs Data Strengthens Dollar
Gold prices dipped on Monday as the U.S. dollar soared to an over two-year high after a robust jobs report last week cemented expectations the Federal Reserve will proceed with caution with cutting interest rates this year.
Spot gold fell 0.7% to $2,670.86 per ounce as of 10:00 a.m. ET (1500 GMT), after dropping as low as 1% earlier in the session. Prices hit their highest in a month on Friday.
U.S. gold futures were 0.9% lower at $2,689.80.
The dollar index (.DXY), rose to its highest since November 2022 after the U.S. jobs report underscored the strength of the economy and muddied the Fed outlook.
A higher dollar makes bullion more expensive for overseas buyers.
Trump will be sworn in as president of the U.S. next week. His proposed tariffs and protectionist trade policies are expected to be inflationary and could spark trade wars, adding to gold's allure as a safe-haven asset.
Investors now await U.S. inflation data, weekly jobless claims and retail sales this week for further insights into the economy and the Fed's policy plans.
Currently, markets expect 25 basis points cut this year, compared with expectations of 40 basis points last week.
Higher interest rates make the non-yielding bullion less attractive.
Spot silver fell 2.1% to $29.76 per ounce, platinum dropped 0.7% to $958.40 and palladium shed 1% to $938.23.
Source : Reuters
