Gold prices fall in early trade

5 Jun 2023 , 08:42 AM

The dollar strengthened on good U.S. payrolls data on Monday, countering support from the likelihood that the Federal Reserve would stop raising interest rates this month, and gold prices dipped somewhat as a result.

Spot gold was down 0.1% at $1,945.66 per ounce. Futures for U.S. gold decreased 0.3% to $1,963.10.

The dollar index increased 0.2%, making bullion priced in greenbacks less accessible to foreign investors.

On Friday, gold prices fell more than 1% after statistics revealed that U.S. nonfarm payrolls increased by 339,000 jobs in the previous month, significantly beyond the 190,000-increase predicted by Reuters’ survey of economists. However, the jobless rate increased to 3.7%, a seven-month high.

According to the CME FedWatch Tool, markets have priced in a 78.7% possibility that the U.S. Fed would maintain interest rates at its meeting on June 13–14 as a result of the higher unemployment data.

In an economy with high-interest rates, non-interest-bearing bullion usually loses some of its appeal.

On Monday, Asian stocks continued their global run on hopes that the Fed will hold off on raising interest rates this month. Meanwhile, oil prices increased as Saudi Arabia pledged significant output cutbacks in July.

Demand for physical gold decreased last week in India as customers put off purchases due to rising domestic prices, while premiums in the largest consumer were supported by a depreciating Chinese currency.

Platinum was unchanged at $1,003.69 per ounce, spot silver was down 0.1% at $23.57 per ounce, and palladium was down 0.1% at $1,418.45.

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