Gold Futures Settle Lower On Firm Dollar, Positive Jobs Data

Gold prices declined sharply on Friday, as the dollar firmed against peers amid bets the Fed would resort to aggressive monetary tightening after data showed the jobless rate in U.S. dropped to a new two-year low in March.

A surge in Treasury yields also weighed on the yellow metal, while concerns about the Russia-Ukraine conflict limited gold’s declined.

The dollar index climbed to 98.74 around mid-morning, and despite subsequently paring gains, remains 0.33% up at 98.65.

Gold futures for June ended down by $30.30 or about 1.6% at $1,923.70 an ounce.

Silver futures for May ended lower by $0.479 at $24.654 an ounce, while Copper futures for May settled at $4.6885 per pound, down $0.0625 from the previous close.

Data from the Labor Department showed non-farm payroll employment jumped by 431,000 jobs in March after surging by an upwardly revised 750,000 jobs in February.

Economists had expected employment to spike by 490,000 jobs compared to the addition of 678,000 jobs originally reported for the previous month.

While the job growth in March fell short of estimates, revisions to data for the two previous months showed employment increased by 95,000 more jobs than previously reported.

The strong job growth still contributed to a drop in the unemployment rate, which dipped to 3.6% in March from 3.8% in February. The unemployment rate was expected to edge down to 3.7%.

A separate report from the Institute for Supply Management unexpectedly showed a modest slowdown in the pace of growth in U.S. manufacturing activity in the month of March.

Overnight data showed that the Federal Reserve’s preferred measure of core inflation jumped to 5.4% on year, its highest level in nearly 40 years.

Eurozone inflation accelerated further to a new record high in March, rising to 7.5% in the month, from 5.9% in February, flash data from Eurostat showed earlier today. The rate was also above the economists’ forecast of 6.6%.

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