Gold prices edged lower on Monday, as the dollar and Treasury yields jumped after a blowout US jobs report dashed hopes for early interest rate cuts from the Federal Reserve.

Gold holds steady as traders eye jobs

Fundamentals

• Spot gold fell 0.1% to $2,036.96 per ounce by 0215 GMT

• US gold futures were flat at $2,053.50 per ounce.

• The dollar index rose to an eight-week high, making bullion more expensive for other currency holders, while yields on benchmark 10-year Treasury notes rose to more than 4%.

• Data from the US Labor Department showed on Friday that nonfarm payrolls increased by 353,000 jobs in January, almost double the 180,000 forecast by economists polled by Reuters.

• Fed Chair Jerome Powell last week dismissed the idea of lowering interest rates in the spring, but voiced confidence that inflation would return to the central bank’s 2% target.

• Traders are betting on five quarter-point Fed rate cuts for 2024, down from six last Monday, according to LSEG’s interest rate probability app IRPR.

• The odds for a cut in May have also lengthened. Lower interest rates boost non-yielding gold’s appeal by decreasing the opportunity cost of holding bullion.

• Investors are awaiting remarks from a host of Fed speakers this week for further clues on rate cuts.

• China’s services activity expanded at a slightly slower pace in January as new orders fell, a private sector survey showed, suggesting a soft start for the world’s No.2 economy amid tepid demand and a property slump.

• COMEX gold speculators cut their net long position by 4,639 contracts to 71,976 in the week ended Jan. 30, data showed on Friday.

• Spot silver fell 0.3% to $22.61 per ounce, platinum shed 0.3% to $893.69, and palladium dropped 0.8% to $939.26.