Gold futures on Friday skidded to potentially the sharpest daily drop in two months, pressured below $1,800, after the U.S. monthly jobs report for July came in better than expected, delivering a further jolt to the U.S. dollar and bond yields and undercutting demand for the precious metals.
December gold GCZ21,
The employment report for July showed that the U.S. economy added 943,000 jobs, according to the Labor Department. Economists had forecast 845,000 jobs last month. Meanwhile, the unemployment rate dropped to 5.4%, below the estimate of 5.7% and falling below 5.9% rate for June.
The drop in prices for gold may be linked to the belief that the jobs report may give the Federal Reserve more ammunition to raise interest rates and taper its $120 billion in monthly asset purchases sooner than later.
All week, silver and gold have been pressured by an uptick in the U.S. dollar, which has risen 0.5% so far, as measured by the ICE U.S. Dollar Index DXY,
“The strength of the US dollar is keeping the pressure on safe havens like gold with the precious metal continuing to drop on Friday,” wrote Pierre Veyret, technical analyst at ActivTrades in a daily research report.
Gold also has been under pressure as equity markets have been trading near record highs, despite concerns about the spread of the highly transmissible delta variant of COVID-19 in many countries.
Meanwhile, silver for September delivery SIU21,
