Gold prices fell below $4,100 as a robust US labor market report strengthened the dollar and fueled hawkish expectations for Federal Reserve policy.
The blowout October NFP of 165K versus 65K expected, plus an upward revision to 60K and unemployment falling to 4.1%, lifted hawkish Fed bets to 77% for a December hike. The DXY jumped 0.62% to reclaim the 102.00 level immediately after the report, reflecting broad dollar strength.
The US economy added 165,000 jobs in October, far above the 65,000 forecast, and the unemployment rate fell to 4.1%. Markets raised the odds of a Fed rate hike in December from 67% to 77%, pushing the Dollar Index up 0.62% above 102.00.
Gold fell nearly 1% from a $4,106 peak to $4,060 after October NFP at 165K crushed forecasts of 65K, lifting Fed December hike odds from 67% to 77%. A stronger dollar (DXY above 102.00) and rising rate expectations pressure the non-yielding metal, with momentum shifting bearish. Downside risk noted below $4,000 toward $3,919 and $3,879.
The October jobs report came in at 165,000 jobs versus the 65,000 forecast and the unemployment rate fell to 4.1%, which pushed odds of a Fed rate hike in December up to 77%. A stronger dollar and higher rate expectations weighed on gold, which drifted below $4,100.
Gold is expected to trade in the $4,050-$4,150 range ahead of next week's US inflation data. A break below $4,000 could extend the decline toward $3,919 and the year-to-date low of $3,879, while clearing the $4,197-$4,202 moving-average confluence would target $4,300.
The 10-year T-note yielded 4.840%, up 0.1%, after the strong jobs report, consistent with higher Fed hike odds of 77% for December. However, yields retreated from intraday highs as investors bought the dip in equities, tempering the move.
The 10-year Treasury note yielded 4.840%, up 0.1%, as the 165,000 jobs print raised expectations of a Fed hike in December, though yields pulled back from their intraday highs.
Gold prices retreated nearly 1% to $4,060 after a stronger-than-expected October jobs report showed 165,000 new positions. The data pushed the US Dollar above the 102.00 level and increased the probability of a Federal Reserve rate hike in December to 77%.
The October jobs report showed 165,000 new jobs, far exceeding the 65,000 forecast, which pushed the odds of a December Fed rate hike to 77%. This strength in the labor market bolstered the US Dollar and weighed on non-yielding assets like gold.
Gold is currently trading in a $4,050-$4,150 range. A break below $4,000 could trigger a decline toward $3,919 and $3,879, while a move above the $4,197-$4,202 moving-average confluence is needed to target $4,300.