As U.S. employment statistics showed a robust labor market and heightened prospects of a May Fed rate hike, gold prices slid 1% to below $2,000 on Monday.
Gold fell 0.9% to $1,990.69 per ounce at 0402 GMT. U.S. gold futures fell 1% to $2,006.30.
“Profit-booking on anticipation of Fed rate hikes followed by Friday’s good U.S. employment growth data and a solid dollar,” said Geojit Financial Services’ head of commodity research Hareesh V.
The dollar index rose 0.1%, making bullion costly for foreign purchasers.
In March, non-farm payrolls rose 236,000, above estimates of 239,000. The unemployment rate fell to 3.5% from 3.6% the month before.
The CME FedWatch program predicted a 66% likelihood of a 25-bps rate hike next month after the news.
It’s just “Gold is bullish short-term. If prices hold over $1,920, the optimistic outlook may persist “Hareesh, Geojit.
Gold is a hedge against inflation, but increasing rates raise the opportunity cost of owning the non-yielding asset.
“The bull trend, formed since November 2022, is still intact,” metals firm MKS PAMP said in a report, but a “stickier” core U.S. CPI on Wednesday would consolidate a 25 bps rise and assure unless there’s a new trigger, gold prices won’t touch all-time highs this month.
Platinum declined 0.5% to $1,002.35 and palladium 0.3% to $1,461.31.
Australia, Hong Kong, and various European markets are closed Monday for Easter.
