Gold Prices Dip as Jobs Data Remains Strong

• Robust Jobs Data Pushes Gold Lower
• Rate Hikes and Positive Sentiment Increase Pressure 
• Other Precious Metals also Drop

In commodities news, gold prices fell lower on Friday to post a weekly decline and finish the day close to $1,920. This was a daily decline of close to 0.7% on spot gold and a move of almost 1.5% lower on the week. A number of factors combined to create the move with strong job data from the US being a particular factor at the end of the week. At the same time, the rising rate environment and the fact that market mood is gaining positivity have all pressured gold. Other precious metals have felt similar pressure, especially on Friday to end the week lower. 

Strong Employment Figures Weigh on Gold

Strong NFP numbers released on Friday acted to accelerate the move of gold lower. The precious metal finished the day almost 1% lower as these numbers from the Bureau of Labor and Statistics showed that unemployment was at 3.6%, lower than the expected 3.7%. 431,000 payrolls were added for the month of March. This is slightly below what analysts had expected at 490,000  but nonetheless indicates a strong and recovering job market.

The robust nature of this data has continued the positive mood that the economy is back on its feet. This has led to a movement away from the traditional safe haven of gold and other precious metals. The US Dollar has also shown some initial signs of weakness throughout the week. A retreat of almost 1% back to around $1,920 is proof that gold is starting to feel the pressure of this positive momentum.

Aggressive Fed Likely to Cap Gold Potential

The more positive than expected employment data makes it all the more likely that the Fed will move ahead in more aggressive fashion with its rate hikes. There had previously been some doubt with the ongoing Russia-Ukraine situation, though that also appears to be edging in the right direction.

The two-year low in unemployment has led some analysts to expect a 50 basis point rise in interest rates from the Fed and Jerome Powell as their next move. Such a move would represent a significant rate hike which would likely curtail the upside even further for gold. 

Other Precious Metals Also Decline

While gold prices drop substantially on Friday, they were not the only precious metal to experience a fall. Silver prices were the biggest loser elsewhere in precious metals. These dropped close to 1.5% on the day, though they had been high above $25. Platinum prices also fell around 0.5% to under the $1,000 mark. 

The relative outlier on the day was palladium which gained 0.5% to finish above $2,260. Focus for the next week will be on the Fed and geopolitics in particular, with both having the ability to move commodity prices in either direction.