Jan 8, 2024: Gold prices continued their decline in Asian trading on Monday, extending losses observed in the preceding session. This retreat came in the wake of robust U.S. labor data, prompting a reconsideration of expectations around potential early interest rate cuts.
The yellow metal experienced a lackluster start to the new year, closely tracking the dollar’s swift rebound as traders tempered their forecasts for the Federal Reserve’s potential rate reductions as early as March.
Market Sentiment Shift: Stronger Labor Data The altered market sentiment was notably shaped by the stronger-than-anticipated nonfarm payrolls report released on Friday, underscoring the labor market’s resilience. This positive data outcome provided the Federal Reserve with more leeway to maintain higher interest rates for an extended period.
The retreat in gold prices was further compounded by a significant wave of profit-taking after a robust upward surge throughout December, culminating in gold finishing 2023 with gains exceeding 10%.
Details of the Decline Spot gold saw a 0.5% drop to reach $2,035.69 an ounce, while gold futures, expiring in February, recorded a 0.4% decrease to $2,042.25 an ounce by 00:00 ET (05:00 GMT). Both instruments faced a cumulative 0.9% decline during the initial week of 2024.
