Gold Drops as Strong US Jobs Data Fuels Fed Rate Hike Expectations
Gold prices fell after robust US jobs data boosted expectations that the Federal Reserve is likely to raise interest rates this year, putting pressure on the precious metal. Spot gold traded around $4,367.77 per ounce at 10:11 a.m. New York time, after dropping approximately 2.4% during the session.
The strength of the labor market keeps the door open for potential rate hikes, while tensions in the Middle East continue to push energy prices higher. Rising interest rates generally weigh on non-yielding assets like gold. Elias Haddad from Brown Brothers Harriman & Co. highlighted that gold faces “two major headwinds: rising real yields and a stronger US dollar.” A break below the 200-day moving average could signal the risk of further declines.
Investors are currently pricing in a quarter-point Fed rate hike by December, with roughly a 60% probability of one as early as October. Previously, markets had expected the next hike to occur in March. Fed officials are scheduled to meet on June 16–17 under newly appointed Chairman Kevin Warsh.
Meanwhile, interim peace efforts between the US and Iran remain stalled. Fighting in Lebanon and conflict in the Strait of Hormuz continue to raise concerns over energy supply, driving oil prices higher and adding to global inflation worries. Other precious metals also weakened: silver fell 6% to $69.41 per ounce, while platinum and palladium posted declines. The Bloomberg Dollar Spot Index rose 0.3%.(mrv)
Source : Newsmaker.id
