Gold edges down as dollar strengthens

Gold prices fell in European trade for another session on track for two-month lows, as dollar continues to dominate. 

The latest US payrolls report bolstered the case for high US interest rates for an extended duration, and hurt chances of a US rate cut later this year.

Haven demand on the precious metal declined as well after Congress passed the bill raising the US debt ceiling, squashing concerns of a financial default. . 

Gold Prices Today

Gold prices fell 0.5% to $1,938 an ounce, with a session-high at $1,950, after losing 1.5% on Friday, the first loss in four days, and the largest since May 5, resuming losses after a short recovery from two-month lows at $1,932. 

Gold lost 0.5% last week, the fourth weekly loss in a row, and the longest such streak of losses since June 2022 as dollar strengthens. 

The Dollar

The dollar index rose 0.3% on track for a second session, almost hitting 11-week highs at 104.69, against a basket of major rivals.

A stronger dollar makes dollar-denominated gold futures costlier to holders of other currencies. 

US Jobs Data

The US economy added just 339 thousand new jobs in May, beating estimates of 193 thousand handily. 

However, US unemployment rose to a 7-month high at 3.7% from a 53-year nadir at 3.4% plumbed in April, while averages wage rose 0.3% last month, slowing down from 0.4%. 

US Rates

As wages slow down and unemployment increases, it's now likely the Federal Reserve will hold off raising interest rates in June.

Current pricing for a 0.25%% Fed interest rate hike in June currently stands at 27%.

Pricing for such hike at the July meeting however now stands at a strong 65%. 

US Debt Ceiling

Both chambers of Congress passed the bill raising the US debt ceiling until January 2025, while putting limitations on government spending until the 2024 presidential elections.

US President Joe Biden plans to sign the bill into law later today to avoid a default on financial payments. 

The SPDR

Gold holdings at the SPDR Gold Trust stayed flat on Friday at 938.11 tones, the lowest since May 17.