Gold bars on display at the US Bureau of Engraving and Printing in Washington, DC. Photo: AFP/VNA

Gold prices fell sharply after the latest report showed growth in the US labor market. According to the US Department of Labor, 272,000 jobs were created in May, higher than the 185,000 jobs expected by experts. Analysts noted that the solid growth in the labor market could force the US Federal Reserve (Fed) to postpone interest rate cuts this year.

The latest jobs data added to the selling pressure on gold during the day, after the precious metal had been on a gradual slide as data from the People’s Bank of China (PBoC) showed the bank bought no gold last month, ending a record 18-month streak of additions.

Some experts say the “plunge” in gold prices is due to the market focusing on solid gains in the labor market. According to Axel Merk, chairman and chief investment officer of Merk Investments, the number of people working two jobs remained at an all-time high in December 2023.

In addition, some analysts noted that full-time employment fell sharply last month while part-time employment rose. Pepperstone senior research strategist Michael Brown said that while the latest jobs report is causing markets to adjust interest rate expectations again, it is unlikely to change the Fed's outlook. He pointed out that inflation data continues to dominate central bank sentiment.

According to many experts, the Fed may cut its benchmark interest rate in September and again this year. Lower interest rates reduce the opportunity cost of holding gold, which is a non-yielding asset.

According to baotintuc.vn