BENGALURU: Gold retreated back under $2,000 an ounce on Friday as the dollar and Treasury yields strengthened after traders trimmed bets for US interest rate cuts to materialize by March following stronger-than-expected jobs data.
Spot gold fell 1.4% to $2,000.49 per ounce by 2:15 p.m. ET (1915 GMT) after hitting a session low of $1,994.49 earlier. Prices were down 3.4% so far for their worst week in ten. US gold futures settled 1.6% lower at $2,014.50.
US job growth accelerated in November while the unemployment rate fell to 3.7%, signalling underlying labour market strength that made traders bet that it could take the Federal Reserve until May to deliver the first reduction in a series of interest-rate cuts next year.
“Gold has slumped as the US employment report showed strength across the board,” said Tai Wong, a New York-based independent metals trader. “This close at lows, $150 below Sunday’s all-time high, has shifted the narrative on the Fed meeting. Now, gold bulls are hoping for a friendly Fed result that will prevent a deeper correction, if not a rout.”
The dollar index firmed 0.7% for the week, making bullion more expensive for overseas buyers, while 10-year Treasury yields rebounded from three-month lows. Traders awaited up-to-date interest rate projections for next year from the Fed policy meeting on Dec. 12-13.
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