US data lifts dollar, gold tumbles 1%

8 Apr 2024 , 10:30 AM

Monday saw a more than 1% decline in gold prices as the dollar and Treasury yields remained stable following robust U.S. data that raised questions about the Federal Reserve’s potential to decrease interest rates three times this year.

After reaching a record high of $2,330.06 on Friday, spot gold was down 1.1% at $2,305.09 per ounce.

American gold futures decreased by 0.9% to $2,324.20 an ounce.

Benchmark U.S. 10-year Treasury yields increased along with the dollar’s 0.1% gain against its competitors, which decreased the appeal of gold to other currency holders.

Wages rose steadily in March and U.S. job growth above forecasts, indicating that the economy concluded the first quarter firmly and perhaps postponing this year’s projected interest rate cuts by the Federal Reserve.

Minneapolis Fed President Neel Kashkari stated last week that although he had scheduled two interest rate cuts for this year at the U.S. central bank’s meeting last month, none might be necessary by year’s end if inflation continues to stagnate.

Having non-yielding gold becomes less appealing when interest rates rise.

In the meantime, premiums held steady in China, the country with the largest consumer base, while physical gold demand in India remained muted last week due to a sharp increase in domestic prices.

With an upbeat outlook, Asian markets hope to begin a week filled with important local economic data and policy choices.

Chinese Premier Li Qiang was informed by U.S. Treasury Secretary Janet Yellen of her worries regarding China’s excess industrial capacity.

Spot silver dropped 1.9% to $26.95 per ounce, palladium lost 1.3% to $989.75, and platinum dipped 0.5% to $922.80.

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