Gold steadied as investors weighed signs of an economic rebound amid better-than-expected U.S. jobs data against the implications of President Joe Biden’s spending plans.
U.S. employers added the most jobs in seven months with improvement across most industries in March, as more vaccinations and fewer business restrictions supercharged the labor market recovery. Nonfarm payrolls increased by 916,000 last month and February employment was revised up to a 468,000 gain, according to a Labor Department report Friday.
Meanwhile, traders are also watching the progress of debate over Biden’s $2.25 trillion infrastructure proposal, as Republicans expressed guarded support for a more limited plan. Trading is likely to be muted on Monday as markets including Australia, China and Hong Kong are shut for holidays.
Bullion posted its first quarterly drop since 2018 on rising bond yields and optimism over a recovery from the pandemic. Investor sentiment around the precious metal has dimmed -- holdings in bullion-backed exchange-traded funds have dropped to the lowest since May, while hedge fund managers cut net bullish gold bets to a three-week low.
“Friday’s U.S. jobs report once again shows why gold is likely to face an uphill climb -- the global economy is recovering fast, and demand for gold may stall,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. “We still expect selling pressure on gold to persist for the time being.”
Spot gold fell 0.2% to $1,725.39 an ounce at 10:59 a.m. in Singapore. Silver and palladium dropped, while platinum advanced. The Bloomberg Spot Dollar Index was little changed.
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