The price of gold futures took another hit, falling below the $1,970 mark, as investors redirected their focus towards riskier assets such as stocks, leading to a sell-off in gold, which is typically considered a safe-haven asset. The market sentiment shifted following a relief in concerns surrounding the US economy and the possibility of a debt default.
Closing the session, the gold contract recorded a decline of $25.70, equivalent to 1.29%, settling at $1,969.80 per ounce.
The positive sentiment in the market was influenced by US President Joe Biden’s acknowledgment of the robust job numbers. Additionally, the agreement reached between Democrats and Republicans to raise the debt ceiling provided further stimulus to the US economy.
The US Department of Labor reported that non-farm payrolls witnessed a significant increase of 339,000 jobs in May, surpassing analysts’ expectations of 190,000 jobs. This employment data reflects a strong labor market, with job growth observed for the 29th consecutive month.
Gold prices were further weighed down by a resurgence in US Treasury yields, which amplified the cost of holding gold. Unlike other assets that generate interest income, gold lacks such interest-bearing characteristics, making it less attractive in a rising yield environment.
Investors’ preference for riskier assets, combined with the positive economic indicators and the impact of rising bond yields on the gold market, contributed to the downward pressure on gold futures, pushing prices below the $1,970 threshold.
The Spot Market is Closed
Saturday, June 3, 2023