Gold Prices Decline Amid Strong U.S. Employment Data and Dollar Strength
Gold prices experienced a notable decline on Friday, as the precious metal is set to record weekly losses under the pressure of solid U.S. labor market data, which has reduced expectations for an upcoming interest rate cut, further supported by a strong performance of the U.S. dollar.
Specifically, spot gold transactions showed a decrease of 0.2%, reaching $4,062.79 per ounce at 01:57 GMT, marking a weekly decline of 0.3%. Meanwhile, U.S. gold futures for December displayed a slightly different trend, with a modest increase of 0.2% to $4,068.10 per ounce.
This downward pressure is attributed to a delayed report from the U.S. Department of Labor, which was postponed due to a federal government shutdown, revealing an increase of 119,000 non-farm jobs in September, significantly exceeding expectations of 50,000 jobs.
These strong economic indicators prompted market participants to adjust their expectations, with only about 39% now anticipating that the U.S. Federal Reserve will cut rates next month, down from earlier expectations of 60% at the beginning of the month. It is important to note that gold, which does not yield returns, typically increases in low interest rate environments.
Additionally, the strengthening dollar added to the pressure on the precious metal, as the U.S. currency is on track for its best weekly performance in over a month, making gold, priced in dollars, more expensive for holders of other currencies.
In terms of other precious metals, performance varied; silver in spot transactions fell 0.4% to $50.39 per ounce, while platinum rose 0.4% to $1,517.95, and palladium increased 0.3% to $1,381.22 per ounce.
