Gold falls to 11-week low over the past 24 hours

Photo (c) somboon kaeoboonsong - Getty Images

A stronger dollar is weighing on gold, as is the anticipation of a better-than-expected jobs report

Gold tumbled to its lowest value since mid-April on Tuesday, in part due to a stronger dollar and because of anticipation related to this week’s U.S. jobs report. 

The Labor Department is set to release data on Friday that will show a gain of 690,000 jobs this month, compared with 559,000 in May, according to a Reuters poll. Bob Haberkorn, senior market strategist at RJO Futures, says a stronger dollar is combining with the expected jobs data to put downward pressure on gold. 

“The calls for interest rates to trend higher are going to be much louder from the Fed if we do get a better-than-expected jobs number,” he told Reuters. 

In the run-up to the release of the report, Spot gold fell 0.93% to $1,761.66 per ounce (as of 1:39 pm EDT Tuesday) after reaching $1,749.20 -- its lowest value since April 15. U.S. gold futures slipped about 1%, hitting $1,763.60.

Market uncertainty waning 

In early June, gold was valued at over $1,900 an ounce -- a six-month high. The precious metal performed well throughout the pandemic, a trend reflective of its tendency to be utilized as a “safe haven” asset during times of market uncertainty. 

But now that markets are strong, investors are finding it harder to make a bullish case for gold. Friday’s employment numbers will come on the back of comments from Richmond Fed President Thomas Barkin, who suggested that the Fed had made “substantial further progress” in its inflation goal in order to begin tapering asset purchases.

"It's pretty clear to me we have had substantial further progress against our inflation goal," Barkin said during an event at the Rotary Club of Atlanta. "I'm pretty optimistic about the labor market. ... If the labor market opens as I suggested it might, then I think we're going to get there in relatively short order."

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