Gold down as US jobs data curbs rate cut expectations

Gold prices eased on Monday as strong US jobs data reinforced the Federal Reserve’s cautious stance on interest rate cuts and boosted the dollar, though underlying safe-haven demand amid uncertainty around President-elect Donald Trump’s policies curbed losses.

Spot gold was down 0.1 per cent at $2,686.33 per ounce as of 0911 GMT, off almost one-month highs reached on Friday. US gold futures were 0.2 per cent lower at $2,710.60.

The dollar index hit an over two-year high after the US jobs report reinforced the Fed’s cautious approach towards policy easing this year amid concerns of inflation from potential import tariffs under Trump.

A higher dollar makes the greenback-priced bullion more expensive for foreign buyers.

“Stronger dollar and higher US rates remain a headwind for gold, but at the same time elevated market uncertainty coming from higher energy prices, potential tariffs and ongoing inflation concerns, supports safe-haven demand for the yellow metal,” UBS analyst Giovanni Staunovo said.

Trump will take office on Jan. 20 and some economists say his proposed tariffs could potentially ignite trade wars and inflation. In such a scenario, gold, considered a hedge against inflation and economic uncertainty, is likely to perform well.

US consumer price index (CPI), producer price index (PPI), weekly jobless claims and retail sales are the major data due for release this week. A slew of Fed officials are also scheduled to speak and give further insights on the interest rate path.