Gold Slips as Strong US Payrolls Data Boosts Dollar, Dampens Bullion's Appeal

(MENAFN) Gold prices experienced a decline on Monday as the dollar strengthened following robust US payrolls data from the previous week. This offset some of the support for gold, which had been bolstered by expectations that the Federal Reserve might pause rate hikes in June, as reported by Reuters. By 12:46 p.m. Saudi time, spot gold was down 0.2 percent at USD1,944.59 per ounce, hovering near its lowest level since May 30. US gold futures also dropped 0.6 percent to USD1,958.60.

The strength of the dollar, driven by the positive US payrolls data, contributed to the downward pressure on gold prices. Han Tan, Chief Market Analyst at Exinity, remarked that gold bulls' optimism diminished as the rebounding dollar weighed on the precious metal. He added that spot gold is currently testing its 100-day moving average for support.

The decline in gold prices was triggered by Friday's release of data indicating that the US economy added 339,000 jobs in the previous month, surpassing estimates of 190,000. This positive economic news boosted the dollar and led to a decrease in demand for gold.

On Monday, the dollar index rose by 0.2 percent, making gold priced in dollars less affordable for international buyers. Additionally, benchmark US yields remained near a one-week high, further dampening the appeal of gold.

The movement in gold prices serves as a reminder of the complex interplay between various factors influencing the precious metal's value. While expectations of a pause in US rate hikes had initially supported gold, the strength of the dollar and positive economic data have shifted the sentiment, leading to downward pressure on gold prices. As market conditions continue to evolve, investors closely monitor economic indicators and currency movements for insights into gold's future performance.

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