Gold prices fell on Monday, pressured by a stronger dollar as elevated oil prices on the back of a protracted Iran war and stronger-than-expected U.S. jobs data dampened hopes for interest rate cuts by the Federal Reserve.
Spot gold slipped 0.9% to $4,631.69 per ounce by 0306 GMT, while U.S. gold futures for April delivery lost 0.5% to $4,657.50 in thin liquidity trade, with many markets in Asia and Europe closed for a holiday.
“The latest robust NFP print has reinforced hawkish central bank nerves, while persistent oil-driven inflation fears continue to crowd out gold’s traditional safe-haven sparkle,” said Tim Waterer, chief market analyst, KCM Trade.
Data on Friday showed that U.S. nonfarm payrolls increased by 178,000 jobs in March, the most since December 2024, while the unemployment rate fell to 4.3%.
The 10-year U.S. Treasury yield and the dollar index gained, pressuring greenback-priced bullion. Brent oil prices climbed as the U.S.-Israeli war with Iran continued to disrupt global energy supplies.
U.S. President Donald Trump threatened to rain “hell” on Tehran if it did not reopen the Strait of Hormuz by Tuesday, while recent U.S. intelligence assessments suggest Iran is unlikely to reopen the passage any time soon.
The surge in crude prices have stoked concerns about inflationary pressures. While gold is traditionally seen as a hedge against inflation, elevated interest rates tend to dampen demand for the non-yielding asset.
Traders have almost completely priced out any chances of a Fed rate cut this year. Before the Iran war began, there were expectations of two reductions this year.
COMEX gold speculators increased net long positions by 1,098 contracts to 93,872 in week ended March 31.
Spot silver fell 1.4% to $71.98 per ounce, spot platinum shed 0.9% to $1,970.38, while palladium held steady at $1,503.52.
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