Spot gold dropped to around $4,341 per ounce, while U.S. gold futures declined by more than 3%, News.az reports, citing Economic Times.
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The precious metal was also on track for a weekly loss of more than 4%.
The U.S. economy added 172,000 jobs in May, significantly surpassing market expectations of 85,000 new jobs. The stronger labor market data reduced expectations for near term interest rate cuts and increased speculation that the Federal Reserve could maintain or even raise rates amid persistent inflation concerns.
Market analysts noted that higher interest rates tend to weigh on gold prices because they increase the opportunity cost of holding non yielding assets. Following the release of the jobs report, U.S. Treasury yields rose sharply, adding further pressure on bullion.
Inflation concerns remain elevated due to higher energy prices linked to ongoing tensions in the Middle East. Rising oil prices have strengthened expectations that the Federal Reserve will remain cautious about easing monetary policy.
Other precious metals also moved lower, with silver, platinum, and palladium recording notable declines. Market participants are increasingly pricing in the possibility of tighter monetary policy as economic data continues to show resilience in the U.S. economy.
