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Gold slips below $2,000/oz
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March U.S. payrolls rise by 236,000
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63.4% chance seen of Fed rate hike in May- CME Fedwatch
Tool
(Adds graphic and details, updates prices)
By Kavya Guduru
April 10 (Reuters) - Gold prices fell as much as 1% to
slip below $2,000 on Monday, after U.S. employment data pointed
to a tight labour market, raising expectations of another rate
hike by the Federal Reserve in May.
Spot gold was down 0.8% at $1,992.97 per ounce, as of
0613 GMT. U.S. gold futures slipped 0.9% to $2,007.80.
Gold slid due to "profit-booking on expectations of Fed rate
hikes followed by Friday's strong U.S. job growth report and a
steady dollar," Hareesh V, head of commodity research at Geojit
Financial Services, said while noting a technical correction in
prices.
The dollar index was 0.1% higher, making bullion
expensive for overseas buyers. Friday's data from the U.S. Labor Department showed non-farm
payrolls increased by 236,000 jobs in March, versus expectations
of 239,000. The data also showed the unemployment rate dipped to
3.5% from 3.6% in the prior month.
The report raised bets that the U.S. central bank would
increase rates next month, with markets pricing in a 63.4%
chance of a 25 basis-point (bps) hike, according to the CME
FedWatch tool.
But "the short-term outlook remains bullish for gold. As
long as prices stay above $1,920, there are chances for the
bullish outlook to continue," Geojit's Hareesh added.
Gold is traditionally considered a hedge against inflation,
but higher rates increase the opportunity cost of holding the
non-yielding asset.
"The bull trend, established since November 2022, is still
intact," metals firm MKS PAMP said in a note, adding a
"stickier" core U.S. CPI on Wednesday would solidify a 25 bps
hike and ensure that unless there's a new catalyst, gold prices
might not hit all-time highs this month.
Spot silver shed 1% at $24.75 per ounce, platinum lost 0.7% to $1,000.78 and palladium eased 0.1% to
$1,464.79.
Australia, Hong Kong and European markets are closed on
Monday for the Easter holidays.
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(Reporting by Kavya Guduru in Bengaluru; editing by Uttaresh
Venkateshwaran and Sohini Goswami)
