Gold Prices Decline Amid Strong US Labor Data and Dollar Strength
Gold prices experienced a notable decline on Friday, moving towards weekly losses as strong US labor market data diminished expectations for a near-term interest rate cut, compounded by a robust performance of the US dollar.
Specifically, spot gold fell by 0.2% to $4,062.79 per ounce as of 01:57 GMT, marking a weekly decrease of 0.3%. In contrast, December gold futures saw a slight increase of 0.2% to $4,068.10 per ounce.
This downward pressure is attributed to a delayed report from the US Department of Labor, which was postponed due to the government shutdown. The report indicated an increase of 119,000 non-farm jobs in September, significantly exceeding expectations of 50,000.
These strong economic indicators prompted market participants to reassess their expectations, with traders now estimating a 39% chance that the Federal Reserve will lower interest rates next month, down from a 60% probability earlier this month. It is important to note that gold, which does not yield returns, typically performs better in low-interest-rate environments.
Additionally, the strengthening dollar added to the pressure on the precious metal, as the US currency is on track for its strongest weekly performance in over a month, making gold, priced in dollars, more expensive for holders of other currencies.
Regarding other precious metals, performance was mixed; silver fell by 0.4% to $50.39 per ounce, while platinum rose by 0.4% to $1,517.95, and palladium increased by 0.3% to $1,381.22 per ounce.
