Gold prices saw a significant decline dropping by around $50 per ounce. This decline is primarily attributed to robust U.S. labor data and a stronger dollar, which reduced demand for gold as a safe-haven asset. The unexpectedly high U.S. private sector job growth, reported in the ADP employment data, signals continued economic strength, which has led to renewed confidence in the dollar. As a result, investors shifted away from gold and into dollar-denominated assets .
With the Federal Reserve closely monitoring economic indicators, strong labor market data could reinforce its decision to keep rates higher for longer, making interest-bearing assets more attractive compared to non-yielding assets like gold. This outlook has increased the opportunity cost of holding gold, further contributing to its decline in value.
