Gold slipped Monday, pressured by stock-market gains and overall global risk-taking seen after Friday’s U.S. jobs report eased concerns over accelerating inflation and faster U.S. interest-rate hikes.
April gold GCJ8, -0.57% fell $6.90, or 0.5%, to $1,317.20 an ounce. Gold prices ended higher Friday, turning the metal’s weekly return just positive and leaving the year-to-date gain at roughly 0.8% after a report revealed a strong rise in U.S. hiring but disappointing growth in wages.
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The ICE U.S. Dollar Index DXY, +0.07% was little changed at 90.09 Monday. Gold and the dollar typically move inversely as currency levels influence demand among gold buyers using another currency. Higher interest rates tend to be dollar-positive.
The latest snapshot of the U.S. labor market showed strong job growth and a higher participation rate, with the nation adding 313,000 new jobs in February. But the 12-month increase in pay slipped to 2.6% from a revised 2.8% in January.
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.
“I think the [U.S. dollar] could continue to recover this week. That’s because in a relatively quiet week, the main indicator — in fact the main event — is going to be the release of the U.S. CPI for February on Tuesday,” said Marshall Gittler, chief strategist at ACLS Global. “And surprisingly, the market pays more attention to the headline figure than to the core figure.”
“So if Tuesday’s U.S. CPI does show headline inflation accelerating further above the Fed’s 2% target about a week before the next FOMC meeting, that should solidify expectations of higher interest rates and cause the dollar to appreciate further,” he said.
As for other metals, May silver SIK8, -0.83% fell 13 cents, or 0.8%, to $16.470 an ounce. On Friday, it logged a 0.9% weekly gain.
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Among exchange-traded funds, the silver-focused exchange-traded iShares Silver Trust SLV, +0.51% fell 0.6%, while the SPDR Gold Shares GLD, +0.10% fell 0.5%. The VanEck Vectors Gold Miners ETF GDX, -0.37% eased less than 0.1%.
May copper HGK8, -0.70% fell 0.6% at $3.1165 a pound, up about 0.4% for last week. April platinum PLJ8, -0.51% fell 0.5% to $959.70 an ounce, after a weekly loss of just under 0.1%. June palladium PAM8, -0.37% slipped 0.5% to $982.40 an ounce, after a flat return for last week.