The precious metal slumped for a fifth consecutive session on Friday, set for its sharpest drop in more than a year, after a robust U.S. nonfarm payrolls raised expectations the Fed may raise interest rates by the middle of this year.
The jobs report showed that American employers added 295,000 jobs in February, coming above analysts’ forecast of 240,000, while unemployment fell below projections of 5.6 percent to 5.5 percent.
The remarkable progress in the U.S. labor market has raised expectations of seeing an interest rate hike in June, instead of at the end of the year.
Federal Reserve Bank of Kansas City President Esther George said he wants to see an interest rate hike by the middle of the year.
Despite the announcement of the ECB stimulus plan on Thursday and upgrade in inflation forecasts for the euro area, the shiny metal remained vulnerable, surrendering to the pressure of the strong dollar.
Meanwhile, investors tend to hold dollars as the Fed would be the first major central bank to exit the zero-interest rate era.
The dollar index, which tracks the green currency’s movements versus a basket of major currencies, climbed near an 11 1/2-year high around 97.65.
The yellow metal fell from a high of $1200.57 an ounce to trade around $1165.80, while the lowest point was touched at $1164.52.