Gold Futures Settle Notably Lower On Strong Jobs Data

Gold prices fell on Friday, as hopes about interest rate cuts by the Federal Reserve faded after data showed a bigger than expected increase in U.S. non-farm payrolls employment in April.

The dollar’s retreat after climbing higher following the release of the jobs data helped limit gold’s slide a bit.

The dollar index, which rose to 101.78 after the strong jobs data, dropped to 101.21 before edging up to 101.32, down marginally from the previous close.

Gold futures for June ended lower by $30.90 or about 1.5% at $2,024.80 an ounce.

Silver futures for July ended down $0.297 at $25.930 an ounce, while Copper futures for July settled at $3.8830 per pound, gaining $0.0200.

Edward Moya, Senior Market Analyst at OANDA says gold is under pressure after a hot NFP report pushed back Fed rate cut bets, and adds, “The Fed’s next move could still be a cut, but if banking worries continue to ease and the economy remains resilient, some policymakers may want to resume tightening.”

“Gold is getting crushed as risk appetite is running wild today, but those drivers of easing banking worries and a resilient economy won’t last much longer. It might take some time now, but gold still has a good chance to get back in a record setting mood,” he says.

Data from the Labor Department said non-farm payroll employment shot up by 253,000 jobs in April compared to economist estimates for an increase of about 179,000 jobs.

However, the job growth in February and March was downwardly revised to 248,000 jobs and 165,000 jobs, respectively, reflecting a combined downward revision of 149,000 jobs.

The report also said the unemployment rate edged down to 3.4% in April from 3.5% in March. Economists had expected the unemployment rate to remain unchanged.

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