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Gold prices lose 1% of their value under pressure from dollar

Gold prices

Washington D.C. (Business News Report)|| Gold prices lost 1% of their value, early Saturday, under pressure from the US dollar, which rose on the impact of positive US jobs data.

Gold prices fell as investors feared the continued tightening of monetary policy. And gold prices fell to $1,848.67 an ounce, after falling earlier to $1,846.4.

US gold futures fell 1.1% to $1,850.2. The data showed that US employers hired more workers than expected in May and maintained a fairly strong pace of wage increases, signs of a strong labor market.

Higher interest rates in the US increase the opportunity cost of holding gold, which carries no interest, while boosting the dollar in which bullion is priced.

Cleveland Fed President Loretta Meester said she is looking for “convincing” evidence that inflation has peaked, and if it has not, the Fed’s September meeting could see a 50bp rate hike as well.

The dollar rose 0.3%, while US 10-year bond yields approached a two-week high touched earlier in the session.

Gold prices recorded a decline of 0.3% during the week’s trading, although the metal reached its highest level since May 9 at $1,873.79 earlier in the session.

Spot silver fell 1.9% to $21.85 an ounce, down nearly 1% for the week.

Platinum fell 1.4% to $1,008.35, but rose 5.6% during the week, the biggest gain since February 2022.

Palladium fell 3.4% to $1.98320, and fell about 3.8% during the week.

Separately, the US employment rate rose more-than-expected in May, while the unemployment rate held steady at 3.6 percent, which are indications that difficult conditions in the labor market could encourage the Federal Reserve to continue monetary tightening policies to calm demand.

In its closely watched employment report today, the Labor Department said non-farm payrolls rose by 390,000 last month.

The data for the month of April was revised upwards to show that 436 thousand jobs were added instead of 428,000 as previously reported.

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