Gold prices fall in early trade

10 Apr 2023 , 09:34 AM

Gold prices dropped on Monday as the dollar strengthened following the U.S. non-farm payrolls report, which indicated a tight employment market and increased the likelihood that the Federal Reserve would raise interest rates at its May policy meeting.

Spot gold was down 0.4% at $2,057 per ounce. Additionally, U.S. gold futures fell 0.4% to $2,017.80.

The dollar index increased by 0.1%, increasing the price of bullion for international customers.

The U.S. Labor Department’s data released on Friday revealed that non-farm payrolls expanded by 236,000 jobs in March, exceeding predictions of 239,000. The report also revealed a decrease in the jobless rate, from 3.6% in February to 3.5% today.

The information increased betting that the Federal Reserve would increase interest rates next month. According to the CME FedWatch tool, markets are pricing in a 66.3% chance of the Fed raising rates by a quarter of a percentage point.

Klaas Knot, a member of the European Central Bank’s governing council, said on Friday that it was unclear to him whether a rate increase of 50 basis points (bps) was required in May or whether a scale-back to 25 bps was possible.

Last week, physical gold demand in important Asian hubs slowed down as a result of high domestic prices that forced some dealers to provide discounts in order to attract clients.

Spot silver prices down 0.5% to $24.89 per ounce, platinum prices decreased 0.5% to $1,002.67, while palladium prices increased 0.2% to $1,469.55.

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