Gold slips 1 per cent as solid jobs data spurs rate hike bets
GOLD prices fell on Friday (Jun 3), pressured by a stronger dollar and as better-than-expected US jobs data raised concerns of aggressive monetary policy tightening.
Spot gold fell 1 per cent to US$1,848.67 per ounce by 5.59 pm GMT, after earlier falling to US$1,846.40. US gold futures settled down 1.1 per cent at US$1,850.20.
Data showed US employers hired more workers than expected in May and maintained a fairly strong pace of wage increases, signs of labour market strength.
“If the Federal Reserve sees the economy continuing to remain stable in the midst of its rate raising efforts, they might feel more emboldened to raise rates at a faster pace,” said David Meger, director of metals trading at High Ridge Futures.
Higher US interest rates increase the opportunity cost of holding gold, which bears no interest, while boosting the dollar in which bullion is priced.
Cleveland Federal Reserve Bank president Loretta Mester said on Friday she was looking for “compelling” evidence that inflation has peaked, and if it has not, September’s Fed meeting could see a 50 bps rate hike as well.
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The dollar edged up 0.3 per cent, while US benchmark 10-year yields were close to the 2-week high touched earlier in the session.
Gold prices were set to log a 0.3 per cent dip for the week, despite the metal hitting its highest since May 9 at US$1,873.79 earlier in the session.
The medium-term outlook for gold is positive, said Jigar Trivedi, a commodities analyst at Mumbai-based broker Anand Rathi Shares. “Chinese market has reopened hence we don’t rule out retail participation and market is discounting June and July rate-hike events,” Trivedi added.
Spot silver fell 1.9 per cent to US$21.85 per ounce, down nearly 1 per cent for the week. Platinum was down 1.4 per cent to US$1,008.35, yet it was up 5.6 per cent for the week, the biggest gain since Feb. 2022. Palladium fell 3.4 per cent to US$1,983.20 and was down around 3.8 per cent for the week. REUTERS
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