Gold and silver prices fell in Asian trade on Thursday as stronger-than-expected U.S. payrolls data dented expectations of deeper interest rate cuts by the Federal Reserve, although losses were limited by lingering haven demand.
Precious metal prices also retained a bulk of their gains made this week, amid persistent weakness in the dollar and as tensions between Iran and the U.S. kept havens in vogue.
Spot gold fell 0.7% to $5,051.26 an ounce, while gold futures for April fell 0.5% to $5,072.04/oz by 01:36 ET (06:36 GMT).
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Spot silver fell 1.3% to $83.2505/oz, while spot platinum fell 1.6% to $2,107.30/oz.
Gold dips as dollar bounces on strong nonfarm payrolls Losses in gold came after U.S. nonfarm payrolls data, released on Wednesday, read stronger than expected for January.
The print showed unexpected strength in the labor market, and weighed on bets that cooling employment will spur more interest rate cuts by the Fed.
Markets are now pricing in a 94.1% chance the Fed will leave rates unchanged in March, and a 78% chance for a similar trend in April, CME Fedwatch showed.
The print also spurred an overnight bounce in the dollar, which weighed on metal markets.
But the greenback steadied in Asian trade and was still nursing some losses this week, partially due to pressure from a resurgent Japanese yen.
OCBC analysts also noted that a sustained rebound in the dollar will require more signs of resilience in the U.S. economy-- a trend that is expected to provide gold with some respite.
"Structural drags — Fed succession uncertainty and broader US policy risks — mean the USD will still need additional upside surprises in upcoming data to sustain any rebound," OCBC analysts said.
Still, precious metal prices remained skittish after logging wild swings over the past week on heightened uncertainty over U.S. monetary policy.
US inflation, Iran tensions in focus More cues on the U.S. economy are due this week, with consumer price index inflation data for January due on Friday. Inflation and labor market strength are the Fed’s two biggest considerations for rates.
Weekly jobless claims data is also due later on Thursday.
Safe haven demand for precious metals remained in play amid persistent tensions between the U.S. and Iran. While both sides did tout some progress in nuclear talks held over the weekend, Washington was seen preparing to deploy a second aircraft carrier to the Middle East.
U.S. President Donald Trump also repeatedly warned Tehran to accept a deal with Washington, and was seen meeting Israeli President Benjamin Netanyahu on Wednesday.
