Gold Prices Decline Amid Strong U.S. Employment Data and Robust Dollar

Gold prices experienced a notable decline on Friday, with the precious metal facing weekly losses due to strong U.S. labor market data that lowered expectations for imminent interest rate cuts, alongside a strong performance by the U.S. dollar.

Spot gold traded down 0.2% at $4,062.79 per ounce at 01:57 GMT, marking a weekly decline of 0.3%. Meanwhile, U.S. gold futures for December delivery showed a slight increase of 0.2%, reaching $4,068.10 per ounce.

This downward pressure is attributed to a delayed report from the U.S. Labor Department, which indicated an increase of 119,000 non-farm jobs in September, significantly surpassing forecasts of 50,000 jobs.

These robust economic indicators prompted market participants to adjust their forecasts, with current expectations for a 39% chance of the Federal Reserve cutting interest rates next month, down from earlier predictions of 60% earlier this month. It is important to note that gold, which does not yield interest, typically benefits from lower interest rate environments.

Additionally, the strengthening dollar has added to the pressure on gold prices, as the U.S. currency is poised for its best weekly performance in over a month, making dollar-denominated gold more expensive for holders of other currencies.

In terms of other precious metals, performance varied; silver fell 0.4% in spot trading to $50.39 per ounce, while platinum rose 0.4% to $1,517.95, and palladium increased by 0.3% to $1,381.22 per ounce.