Gold prices fall under pressure from US jobs data

  • 11 October, 2021
  • 2:53 pm EEST

Gold prices fell today, Monday, at the beginning of the week’s trading, after the session started flat.

And the weak job growth numbers failed to calm expectations that the US Federal Reserve will begin to scale back its stimulus this year.


Gold Prices Today

By 10:08 AM GMT (0:02 PM GMT), gold futures contracts, for December delivery, were down 0.12%, recording $1,755.30 an ounce.

Last week, the yellow metal prices recorded slight weekly losses of 0.05%.

By 10:17 AM GMT (0:17 PM GMT), spot gold prices decreased by 0.10%, recording $1,755.33 an ounce.


Pay And Job Pressures

“The payroll data is not going to do anything to prevent the Fed from tapering off,” said EG market analyst Kyle Rhoda. “Labour shortages are feeding on higher wage pressures and that could exacerbate inflation further, which means they will eventually have to step in.”

Bullion is seen as a hedge against inflation and currency depreciation is likely to be a widespread catalyst. A Fed cut can address both of these conditions; This reduces the attractiveness of gold.

Kyle Rhoda added: “The gold market is having a lot of trouble finding odds and ends where it should go from here, my personal bias is the downside, but we are stuck in a range at the moment.”


Federal Reserve

The Federal Reserve may move to start reducing its support for the economy next month despite a slowdown in job gains last month.

Friday’s data showed US non-farm payrolls rose by 194K in September, less than economists’ expectations of 500K.

Meanwhile, the unemployment rate fell to an 18-month low of 4.8% and wage gains accelerated.

In the face of the energy crunch and weak non-farm payrolls for September, gold is still trading below $1800.

A number of economists said there is little conviction among gold bulls, and that gold is likely to settle at $1,500 before the end of 2022.

The dollar rose to its highest level in nearly 3 years against the yen, while US 10-year Treasury yields touched their highest level since early June on Friday; This increases the opportunity cost of holding gold without interest.


Metal Prices

On the other hand, the prices of silver futures contracts, for December delivery, decreased by 0.53%, to record $22.59 an ounce.

And spot prices for platinum rose 0.41%, recording $ 1032.38 an ounce, and palladium rose by 3.94% to $ 2161.19 an ounce, after previously reaching its peak since September 13 last.

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