Gold falls on strong US jobs data and improved trade outlook

Gold prices fell on Monday (Jun 9) as a stronger-than-expected US jobs report cooled expectations of interest rate cuts from the Federal Reserve, while optimism over easing trade tensions between US-China weighed on the bullion’s safe-haven demand.

Spot gold fell 0.2 per cent to US$3,303.19 an ounce, as at 0056 GMT. US gold futures fell 0.7 per cent to US$3,323.40.

Three of US President Donald Trump’s top aides will meet with their Chinese counterparts in London on Monday for talks aimed at resolving the trade dispute between the two largest economies that has kept global markets on edge.

The US economy added 139,000 jobs in May, surpassing analysts’ expectations, while the unemployment rate was unchanged at 4.2 per cent, the Labor Department said.

Wage growth also exceeded forecasts, dampening the likelihood of imminent rate cuts.

Investors have scaled back bets on rate cuts, now anticipating one reduction in October.

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Trump, meanwhile, said that a decision on the next Federal Reserve chair would be announced soon, adding that a “good Fed chair” would lower interest rates.

The US dollar index edged slightly up, making gold more expensive for overseas buyers.

On the geopolitical front, Trump’s order banning citizens of 12 countries from entering the US goes into effect on Monday.

Russia stated on Sunday that its forces had advanced to the edge of Ukraine’s Dnipropetrovsk region amid tensions over peace talks and the repatriation of soldiers’ remains.

Gold, often seen as a hedge against inflation and geopolitical uncertainty, could face pressure from higher interest rates, which reduce its appeal as a non-yielding asset.

Elsewhere, spot silver remains unchanged at US$35.94 per ounce, platinum fell 0.5 per cent to US$1,163.10, while palladium was down 0.5 per cent to US$1,041.75. REUTERS