Yellow metal heads for mild 0.5% weekly loss.
Gold prices headed toward their third decline in a row on Friday as a leading dollar index strengthened and stocks headed for gains, cheered on by an upbeat jobs report.
Gold extended its losses, and the dollar stretched its gains, after the latest snapshot on the U.S. job markets showed strong job growth and a higher participation rate, although tempered wages, a report that overall keep the Federal Reserve on track with interest-rate hikes this year.
“The wage numbers were less than the marketplace expected, suggesting tamer inflation. The jobs report falls squarely into the camp of the U.S. monetary policy hawks, who want to see interest rates rise sooner,” said Jim Wyckoff, senior analyst with metals firm Kitco.com.
April gold GCJ8, fell $6.20, or 0.5%, to $1,315.60 an ounce, sliding without interruption since closing Tuesday at its highest level Feb. 16. The contract is on track to post a 0.2% decline for the week, leaving its year-to-date gain at just 0.5%.
The ICE U.S. Dollar Index DXY, +0.07% rose 0.3% to 90.35. Commodities priced in dollars often trade inversely with the buck, as moves in the U.S. unit can influence the attractiveness of those commodities to holders of other currencies.
Despite the big increase in hiring, wage growth moderated. Hourly pay rose 4 cents to $26.75 an hour, but the yearly increase in wages tapered off. The 12-month increase in pay slipped to 2.6% from a revised 2.8% in January.
Still, the strong report makes it a virtual lock that the Federal Reserve will increase interest rates when senior officials meet this month.
Markets had braced for a stronger wages reading after an inflation scare within this report a month earlier helped sink stocks. Rising inflation could add pressure on the Fed to speed up its rate rises, which could strangle the stock market. Gold, in turn, although impacted negatively by higher interest rates, could attract hedging demand against too-hot inflation.
Markets appeared to largely push aside news that President Trump has accepted an invitation to meet North Korea’s leader. The meeting could be held as early as May, according to a senior South Korean official who made the announcement at the White House on Thursday evening. But the news did give Korean stocks a boost. MarketWatch reports.
