Last Update: July 07, 2023, 02:06 AM IST
New York, United States (USA)
Gold is highly sensitive to rising US interest rates, as they increase the opportunity cost of holding non-yielding bullion.
Spot gold was down 0.4% at $1,910.15 an ounce as of 2:08 p.m. EDT (1808 GMT), while US gold futures were down 0.6% at $1,915.40.
Gold prices fell to near one-week lows on Thursday after a better-than-expected US private payrolls report raised hopes of more rate hikes from the Federal Reserve, lifting Treasury yields.
Spot gold was down 0.4% at $1,910.15 an ounce as of 2:08 p.m. EDT (1808 GMT), while US gold futures were down 0.6% at $1,915.40.
US private payrolls rose more than expected in June, indicating a strengthening labor market despite rising recession risks from higher interest rates.
The benchmark US 10-year Treasury yield rose to a peak in more than four months, while the yield on the two-year US Treasury note rose to its highest since June 2007 following jobs data.
“The weakness we’re seeing in gold reflects expectations the Fed is more likely to raise interest rates at its July meeting,” said David Mager, director of metals trading at High Ridge Futures.
“We continue to see jobless claims continue to decline and ADP private payroll numbers came in better than expected. As a result, we are seeing a rise in yields and hence some further pressure has been applied on the gold market.”
Data showed that the number of Americans filing new claims for unemployment benefits increased marginally last week, pointing only to a gradual easing of labor market conditions.
Fed Bank of Dallas President Lori Logan said there was a case for a rate hike at the June policy meeting, reaffirming her view in comments that more rate hikes would be needed to calm the still-strong economy.
According to the CME’s FedWatch tool, investors now see a 92% chance of a 25-basis-point hike in July after last month’s stagnation. High rates discourage investment in zero yielding gold.
The focus remains on Friday’s US non-farm payrolls report for more clarity on the Fed rate-hike path.
Silver fell 1.8% to $22.68 an ounce, platinum fell 1.4% to $902.66, while palladium slipped 1.3% to $1,244.09.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – reuters,
