Gold futures closed lower on Friday (April 1) under pressure from a stronger dollar and higher 10-year Treasury note yields following the release of March employment data in the United States.
- The gold futures fell $30.3, or 1.55%, at $1,923.7 an ounce and were down 1.6% for the week.
- Silver was down 47.9 cents, or 1.91%, at $24.654 an ounce.
- The platinum contract was down $7.2, or 0.72%, at $988.6 per ounce.
- Palladium was up $11.90, or 0.5%, at $2,267.50 an ounce.
Gold contracts are under pressure because of the stronger dollar. The dollar index against the six major currencies in a basket of currencies rose 0.33% to 98.6320 on Friday, with a stronger dollar making gold contracts more expensive for investors holding other currencies. The prospect of accelerated interest rate hikes by the Federal Reserve (Fed) to curb inflation following the release of strong economic data sent the dollar higher.
The U.S. Labor Department reported Friday that nonfarm payrolls rose by 431,000 in March. The unemployment rate fell to 3.6%.
According to the release of the CME Group’s FedWatch tool, 73.3% of investors expect the Fed to raise interest rates by 0.50% at its May meeting, after raising rates by 0.25% in March.
S&P Global reported Friday that the final U.S. manufacturing Purchasing Managers Index rose to 58.8 in March, above the initial reading of 58.5. A reading above 50 indicates that the U.S. manufacturing sector continues to expand.
Gold futures have also been pressured by rising U.S. government bond yields. Investors see this as a rising opportunity cost because gold is an investment that does not yield interest gains.
The yield on three-year U.S. Treasury bonds rose to 2.626%, while the yield on five-year Treasury bonds increased to 2.576%. The yield on three-year bonds was 2.448%, while the yield on 30-year bonds was 2.536%.
The decline in commodity prices also put pressure on gold futures. U.S. crude oil futures fell below the $100 per barrel mark on Friday.
The Spot Market is Closed
Saturday, April 2, 2022