Gold eases on strong US data but holds near $2000 pivot

  • March US payrolls rise by 236,000
  • About 68% chance of Fed rate hike in May
  • Focus on US CPI data on Wednesday

April 10 (Reuters) – Gold fell on Monday after strong U.S. jobs renewed bets on another rate hike and strengthened the dollar, but persistent economic risks kept safe havens near the $2,000 level.

Spot gold was down 0.3% at $2,000.86 an ounce by 1034 GMT, while U.S. gold futures for delivery were down 0.5% at $2,015.50.

Data from the US Labor Department on Friday showed that non-farm payrolls increased by 236,000 jobs last month.

Markets now see the US Federal Reserve raising interest rates next month,

Gold’s recent decline could also be a technical pullback from near-overbought conditions, said Han Tan, market analyst at Exinity.

But signs that US disinflation is picking up pace, allowing the Fed to halt its rate hikes sooner rather than later, could restore gold to recent highs, Tan added.

Gold is traditionally considered a hedge against inflation, but higher interest rates increase the opportunity cost of holding the non-yielding asset.

Gold breached the $2,000 level last week as some weak US data exacerbated slowdown risks following a rise in oil prices.

“The trend, established since November 2022, is still intact,” metals firm MKS PAMP said in a note.

However, a “stickier” US core CPI would underpin a 25bps rise and ensure, unless there is a new catalyst, that gold prices may not reach all-time highs this month.

The US CPI printout must be delivered at 1230 GMT (8:30 a.m. EDT) on Wednesday.

Higher inflows into gold-backed funds, money managers lifting net long positions to their highest in over a year, and central banks increasing gold reserves in recent months remain positive catalysts for gold, Exinity’s Tan said.

Silver fell 0.2% to $24.97 an ounce, platinum rose 0.2% to $1,009.32 while palladium gained 0.3% to $1,470.11.

Australian, Hong Kong and European markets were closed on Monday for the Easter holiday.


Reporting by Seher Dareen and Kavya Guduru in Bengaluru; Editing by Susan Fenton

Our standards: Thomson Reuters Trust Principles.

Seher Dareen

Thomson Reuters

Seher oversees and writes market reports with the Commodities and Energy team in Bangalore around the clock and monitors newsworthy events in the resources space.

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