Gold flat as US jobs data points to more rate hikes

GOLD prices were steady on Monday (Jun 6), after dropping about 1 per cent in the previous session, following a robust US jobs report that signalled more interest rate increases this year, weighing on non-yielding bullion.

Spot gold was flat at US$1,850.60 per ounce, as of 12.41 am GMT, while US gold futures were up 0.2 per cent at US$1,853.60.

The Federal Reserve is on track for half a point interest rate increases in June, July, and perhaps even beyond as fresh job market data showed no sign the US economy is buckling under the pressure of high inflation and rising borrowing costs.

Gold dropped on Friday after data showed US employers hired more workers than expected in May and maintained a fairly strong pace of wage increases.

Investors ramped up their bets on European Central Bank interest rate rises this year, and priced in a bigger, 50 basis-point hike at one of the bank's policy meetings by October.

Higher rates raise the opportunity cost of holding gold, which yields no interest.

South African precious metals miner Sibanye Stillwater said on Friday that trade unions leading a strike at its gold operations had a mandate from their members to accept a 3-year wage deal.

Ghana's gold production fell 30 per cent last year to its lowest in more than a decade, knocking the country off its spot as Africa's top producer, the president of the mines chamber said on Friday.

Gold discounts widened in India last week as demand faltered due to a rise in prices and a winding up of wedding season, while consumers remained wary of purchasing bullion in top consumer China amid a gradual relaxing of coronavirus restrictions.

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Gold slips 1 per cent as solid jobs data spurs rate hike bets

In other metals, platinum firmed 0.2 per cent to US$1,015.99 and palladium climbed 0.9 per cent to US$1,993.52. Silver rose 0.1 per cent to US$21.92 per ounce. REUTERS