Gold prices dropped sharply on Friday, falling below $3,050 per ounce, after a stronger-than-expected U.S. jobs report cast doubt on the likelihood of an imminent Federal Reserve interest rate cut.
The news prompted a wave of selling across precious metals, pushing both spot gold and gold futures lower.
Gold Futures and Spot Prices See Steep Declines
In the futures market, gold fell by 1.70% (down $53), closing at $3,068 per ounce. Spot gold prices dropped by 2.10%, or $68, settling at $3,046 per ounce.
The drop comes after weeks of strong performance and new highs, reflecting renewed uncertainty over the gold price forecast as economic data shifts expectations.
U.S. Jobs Data Surprises to the Upside
The U.S. Department of Labor reported that 228,000 jobs were added in March, far exceeding economists' expectations of 137,000. Meanwhile, February’s job gains were revised downward to 77,000 from the previously reported 151,000.
The strong labor market data signals resilience in the U.S. economy and challenges the need for immediate monetary easing.
This robust report drastically altered market sentiment. According to analysts, the chances of a Federal Reserve interest rate decision in favor of a rate cut during the May FOMC meeting have now dropped.
Current estimates suggest a 60% probability of maintaining current rates, further fueling downward pressure on gold.
Dollar Index Gains Put Additional Pressure on Gold
In addition to interest rate speculation, the U.S. Dollar Index (DXY) rose by 0.44% to 102.40, adding to gold’s headwinds.
Due to the inverse correlation between the dollar and gold, a stronger greenback reduces demand for the metal among holders of other currencies.
This underscores the dollar index effect on gold in times of economic volatility.
Silver, Platinum, and Palladium Follow Gold Lower
The broader precious metals market also faced declines:
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Silver plunged 5.76% to $30.13 per ounce
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Platinum fell 3.85% to $919.95 per ounce
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Palladium dropped 1.99% to $912.25 per ounce
These widespread losses reflect shifting investor expectations, not only about interest rates but also regarding safe-haven assets.
Gold Price Forecast Hinges on Fed Signals
Investors are now closely watching for any comments or signals from Federal Reserve policymakers.
Even subtle shifts in tone or outlook could impact the next gold price forecast, particularly if the Fed hints at delaying or advancing its interest rate decisions.
Final Thoughts:
With rising uncertainty around U.S. monetary policy and ongoing volatility in the precious metals market, gold investors will need to remain alert to any upcoming economic data and Fed communications that could influence both short-term movements and long-term trends.
