Gold prices experienced downward pressure on Friday due to unexpectedly robust US labor market data, which not only diminished expectations for a March interest rate cut by the US Federal Reserve but also cast doubt on a rate cut in May. The outlook for interest rate cuts later in the year is now under scrutiny.
Prior to the release of the labor market data, the market anticipated a Fed funds rate of approximately 4% at the year-end based on Fed fund futures. Following the data, the expected Fed rate for the end of 2024 increased by around 30 basis points, indicating a reduction in the likelihood of at least one interest rate cut.
This shift led to an appreciation of the US Dollar and a significant rise in US bond yields, creating short-term challenges for the Gold price.
