Gold Came Under Pressure After Positive US Employment Data
Gold Fundamentals & News
Gold prices are down by -1.84% in 24 hours and have reached $2017. The yellow metal extended its loss on Friday and dropped to its 2-day lowest level amid the rising strength of the US dollar. The US dollar Index, which measures the value of the greenback against the basket of six major currencies, is up by +0.31% at 101.70.
Positive US Employment Data Strengthened Dollar
The US economic data released the long-awaited NFP data for the month of April on Friday, which surpassed the market expectations of 181K and came in as 253K. Meanwhile, the Unemployment Rate in April also declined to 3.4% from the forecasted 3.6% and added strength to the greenback. Furthermore, the Average Hourly Earnings for April also showed an improvement of 0.5% against the anticipated 0.3%.
The better-than-expected Employment data from the United States helped gain the US dollar from its lost strength. It also capped the losses triggered by the US debt ceiling expiration and Banking crisis. Additionally, the Federal Reserve’s dovish rate hike, along with talks of pausing the rate hike cycle in the upcoming meetings, was also weighing on the US dollar. However, Employment data gave some support for the greenback, and the effects were seen negatively on the yellow metal.
Rising US Treasury Yields weighed on Gold
The US Treasury Yields on 10-Year bonds rose with +2.87% gains in 24 hours at 3.448. The surge in yield was also due to the addition of 253000 nonfarm payrolls in April combined with a 3.4% unemployment rate. A strong job market means that Federal Reserve will halt its aggressive tightening campaign. Therefore, the increased optimism added risk sentiment in the market and weighed on safe-haven assets like yellow metal.