The dollar puts pressure on gold after the release of unexpected jobs data economy

Gold prices fell – today, Monday – after the stronger-than-expected jobs report in the United States supported the dollar and reinforced caution in the Federal Reserve’s policy regarding lowering interest rates.

The prices of the yellow metal in spot transactions fell by 0.2% to $2,684.39 per ounce by 05:30 GMT.

US gold futures also fell by 0.1% to $2,712.

The non-farm payrolls report, which exceeded expectations, showed the strength of the US economy. This report supported the Federal Reserve’s conservative policy towards lowering interest rates, especially in light of fears that President-elect Donald Trump’s pledges – to impose or significantly increase customs duties on imports – would lead to higher inflation rates.

These data reinforce the strength of the US currency, making dollar-denominated gold more expensive for buyers in other currencies.

The US Department of Labor’s Bureau of Labor Statistics reported that non-farm payrolls rose by 256,000 jobs last month, the largest number since last March.

Investors are closely monitoring the release of the monthly consumer price index later this week, focusing on statements by some Federal Reserve officials for indications about the slowdown in the US economy. Such a slowdown could halt the rise in the dollar and Treasuries, raising hopes for lower interest rates.

For his part, John Rong, a market analyst at IG, says, “The data issued this week indicate cautious expectations at the present time.”

According to the Fed Watch tool, traders expect the Federal Reserve to keep interest rates unchanged at its meeting scheduled for later this month, and expect only one interest rate cut this year in June.

Gold is considered a hedge against inflation, but high interest rates reduce the attractiveness of holding the precious metal because it does not generate returns.

As for other precious metals, silver prices in spot transactions fell by 0.6% to $30.21 per ounce, platinum fell by 0.4% to $960.54, while palladium stabilized at $947.40.