By Anushree Ashish Mukherjee and Ashitha Shivaprasad
(Reuters) – Gold prices slipped on Friday as the dollar and yields jumped following a strong U.S. nonfarm payrolls report, which created some uncertainty about whether the Federal Reserve might start cutting interest rates soon.
Spot gold was down 0.9% to $2,035.59 per ounce at 08:46 a.m. ET (1346 GMT), but prices were up 0.6% for the week and have held above the key $2,000 area since the start of the year. U.S. gold futures fell 0.9% to $2,052.40.
The dollar index was 0.5% higher, making bullion more expensive for overseas buyers. Benchmark 10-year bond yields US10YT=RR also gained. [USD./] [US/]
U.S. employers added 353,000 jobs in January, beating the 180,000 jobs economists had expected. A resilient economy and strong worker productivity encouraged businesses to hire and retain more employees, a trend that could shield the economy from a recession this year.
With a decline of less than 1% since the data, gold is “holding on like a barnacle despite a whopper of an employment report,” said Tai Wong, a New York-based independent metals analyst.
“But we might need to wait a little and see if gold grinds much lower,” added Wong.
According to the CME Fed Watch Tool, traders now expect about a 78% chance of a U.S. rate cut in May, compared to 92% before the data. Lower interest rates boost non-yielding bullion’s appeal.
Fed Chair Jerome Powell this week dismissed the idea of lowering interest rates in the spring, but voiced confidence that inflation would return to the 2% target.
“If these (interest) rates stay where they are and there is a lack of clarity around that, what we’ll likely see is a rather muted environment for the upside for gold,” said WGC market strategist Joseph Cavatoni.
Among other precious metals, spot silver lost 2.3% to $22.63 per ounce, platinum fell 0.7% to $906.92 and palladium was down 0.6% at $956.53.
(Reporting by Anushree Mukherjee and Ashitha Shivaprasad in Bengaluru; Editing by Mark Potter)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.