Gold prices fell during Friday’s Asian trading after the United States’ better-than-expected jobless claims data pointed towards a pause in interest rate cuts.
Spot gold was down 0.7% to US$4,598.24 per ounce by 3:30 pm AEDT (4:30 am GMT). Silver dipped 0.8% to $90.67.
Applications for U.S. unemployment benefits unexpectedly fell to 198,000 last week, below Dow Jones estimates of 215,000. Claims from the prior week were 207,000, with the four-week moving average at 205,000.
“This suggests that layoffs in the U.S. labour market may be easing,” Westpac senior economist Mantas Vanagas said. “Nevertheless, these figures should be viewed with caution, as shifting seasonality may have influenced the results.”
The Federal Reserve may be nearing the point where it could stop lowering interest rates, with further rate cuts depending on if the labour market continued to stagnate, Minneapolis Federal Reserve President Neel Kashkari said last week.
Traders project a 95% chance of interest rates remaining at 3.50-3.75% at the Fed’s next meeting on 28 January, according to CME FedWatch, and a 79% chance that they will hold at this level at the Fed’s March meeting.
The jobless claims data also pushed the U.S. dollar index to its higher point since 2 December during U.S. trading, making gold purchases more expensive for buyers outside the country.
The U.S. has partly de-escalated its rhetoric against Iran, meanwhile. U.S. President Donald Trump had threatened military strikes on Iran if its government continues to kill protesters, but he has now claimed that executions and killings have stopped.
White House Press Secretary Karoline Leavitt said today that “all options remain on the table”, however.
