Title: Gold Down, Near Three Week Low as Investors Prepare for Fed Rate Hikes

Jan 09, 2022 07:56AM ET

By: AnalysisWatch

Gold prices fell in Asia on Monday and remained near a three-week low as investors digested the latest US jobs report and now turned to inflation data.

Gold futures fell at 10:51 p.m. ET (3:51 a.m. GMT), down 0.35% at $1,791.05 an ounce, after hitting a low of $1,782.10 an ounce on Friday, the lowest since December 16.

US government bond yields rose last week following an aggressive stance by the Federal Reserve in the minutes of its December 2021 meeting.

The US labor market report for December, released on Friday, showed non-farm payrolls came in lower than expected at 199,000, while the unemployment rate came in lower than expected at 3.9%.

Investors are now waiting for inflation data, including the consumer price index, to be released later this week. Meanwhile, China will also release its consumer and producer price indices on Wednesday.

Fed funds futures have already priced in a near 90 percent chance of a Fed rate hike in March 2022 and a more than 90 percent chance of another rate hike in June. The central bank could also accelerate its asset reduction program.

Rising tensions between the US and Russia over Ukraine are also on the radar as talks suggest the two sides are far from an agreement and the risk of armed confrontation is rising.

Increasing retail appetite for physical gold prompted Indian traders to charge premiums last week, while the upcoming New Year holiday in Singapore brightened the sales outlook.