Apr 04, 2022 03:56AM ET
Gold prices were steady on Monday as the dollar and Treasury yields strengthened following a solid US payrolls report that raised expectations of aggressive interest rate hikes, while the worsening Ukraine crisis boosted safe-haven bids for gold.
Spot gold was unchanged at $1,928.16 an ounce by 03:00 AM ET. U.S. gold futures rose 0.2% to $1,928.10.
While the conflict in Eastern Europe may have provided a slight wind in the sails as gold prices fell, it is now quite clear that the main price inputs into gold have shifted to the impact of higher US yields and a higher US dollar, OANDA senior analyst Jeffrey Halley said, adding that Asian trading was subdued due to the holiday in China.
A stronger dollar makes gold less attractive to holders of other currencies, while higher yields increase the opportunity cost of holding outstanding bullion.
The dollar posted a solid start to the week, while Treasury yields were also higher as the monthly US jobs report indicated a strong labour market and is likely to keep the Federal Reserve on track to maintain its hawkish policy stance.
US employment data showed the unemployment rate fell to a new two-year low of 3.6% and wages are accelerating again, putting the Fed in a position to raise interest rates by a significant 50 basis points in May.
Investors are expecting a possible discussion of a 50 basis point rate hike when the Fed releases the minutes from its March meeting on Wednesday.
Spot gold may fall to $1,898 after it broke support at $1,924 an ounce, according to Reuters technical analyst Wang Tao.
Spot silver increased 0.8% to $24.81 per ounce, platinum increased 0.5% to $990.38, and palladium increased 2.1% to $2,323.42.