GOLD HITS BY DOLLAR
Due to a stronger dollar and rising bond yields following the Federal Reserve's comments and a strong U.S. jobs report that crushed hopes for an early interest rate cut, gold fell 1% on Monday to a level below that of a week ago.
At 9:32 a.m. ET (1432 GMT), spot gold prices fell 1.1% to $2,017.27 per ounce, the lowest since January 25.
Gold futures in the US dropped 1% to $2,033.80 an ounce.
"The strong jobs report on Friday is still having an impact today, pushing up treasury yields and the US dollar index, which is weighing on gold," stated Jim Wyckoff, senior analyst at Kitco Metals.
However, he noted that due to geopolitical uncertainty in the market that might swiftly spark some demand for safe havens, gold should continue to hold above the $2,000 level.
As yields on benchmark 10-year Treasury notes US10Y surged to a one-week high, bullion became more costly for other currency holders. The dollar index DXY increased 0.4% to trade close to a three-month high.
The greatest growth in a year was seen in January, with a 353,000 increase in U.S. non-farm payrolls, according to data released on Friday.
The massive increase in jobs and pay shattered expectations of a rate cut by the Federal Reserve next month. Traders also reduced their expectations that the U.S. central bank's April 30-May 1 meeting would result in lower borrowing costs.
Neel Kashkari, the president of the Minneapolis Federal Reserve, stated on Monday that the central bank may decide to delay cutting interest rates due to a robust economy and a potentially higher neutral rate of interest.
Powell stated in an interview that the Fed can be "prudent" in determining when to lower its policy rate because a robust economy gives central bankers time to develop confidence that inflation will continue to decline.
Investors are now watching statements made by a number of Fed speakers this week for additional hints about when rate reduction may occur.
Palladium XPDUSD1! down 0.4% to $942.83, spot silver XAGUSD1! lost 1.6% to $22.31 per ounce, while platinum PL1! increased 0.7% to $896.86.
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