NEW YORK: Gold prices eased on Monday as hopes for a swift economic recovery following strong US jobs and services sector data bolstered gains on Wall Street, although a softer dollar limited the precious metal’s decline.
Spot gold fell 0.1% to $1,727.64 per ounce as of 2:34 p.m EDT (1834 GMT). US gold futures settled little changed at $1,728.80.
“There is broad optimism for the US economic recovery... A strong US stock market is technically a difficult environment for gold,” said Edward Moya, senior market analyst at OANDA.
The S&P 500 and the Dow hit record highs on data that showed the US economy created the most jobs in seven months in March. Meanwhile, a measure of services industry activity surged to a record high.
The dollar hit a more than one-week low, making bullion less expensive for holders of other currencies and limiting gold’s losses.
Meanwhile, US President Joe Biden’s announcement of a long-awaited $2 trillion-plus job plan last week has fuelled concerns over inflation.
“Stimulus is inflationary and potentially bullish for gold in the longer term, and also silver, but on the shorter term traders are focusing on the positive economic aspects of the stimulus package,” said Kitco Metals senior analyst Jim Wyckoff.
On investors’ radar were minutes from the Federal Reserve’s last policy meeting on Wednesday.
“So far, the Fed is quite committed to keep interest rates unchanged until the end of 2023, but if inflation increases ... then they will achieve their long term objective sooner than expected,” said Jigar Trivedi, commodities analyst at Mumbai-based broker Anand Rathi Shares.
“If that happens, we are going to see an increase in interest rates and that will be negative for gold prices.”
Silver dropped 1% to $24.73 per ounce, and palladium fell 0.3% to $2,658.25.
Platinum eased 0.3% to $1,206.28 per ounce after hitting its highest level since March 18 earlier in the session at $1,218.
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