Gold prices drop on robust U.S. jobs and rate cut concerns

Gold prices faced downward pressure on Monday as a combination of a strengthening dollar and robust labor market data from the United States reduced expectations for interest rate cuts by the Federal Reserve. The market sentiment was further influenced by rising oil prices linked to the ongoing conflict involving Iran. Spot gold declined by 0.9% to reach $4,631.69 per ounce, while futures for April delivery in the U.S. dropped 0.5% to $4,657.50. Trading volumes remained relatively thin as several major markets across Europe and Asia were closed for holidays. Tim Waterer, the chief market analyst at KCM Trade, noted that the recent employment figures have impacted the market's outlook on central bank policy. > The latest robust NFP print has reinforced hawkish central bank nerves, while persistent oil-driven inflation fears continue to crowd out golds traditional safe-haven sparkle. Data released on Friday indicated that U.S. nonfarm payrolls grew by 178,000 in March, marking the strongest gain since late 2024. Simultaneously, the unemployment rate settled at 4.3%. These figures pushed the 10-year Treasury yield and the dollar index higher, making bullion more expensive for holders of other currencies. Geopolitical tensions remain a primary driver for energy markets, as the conflict involving Israel and Iranian forces continues to threaten global supply chains. U.S. President Donald Trump has issued stern warnings regarding the potential closure of the Strait of Hormuz, a critical maritime passage. While bullion often serves as a hedge against inflation caused by rising energy costs, the prospect of sustained high interest rates has dampened investor appetite for the non-yielding asset. Market participants have now largely discounted the possibility of a rate cut this year, a significant shift from earlier projections of two reductions. Despite the current price dip, COMEX speculators increased their net long positions by 1,098 contracts to 93,872 during the week ending March 31. In the broader precious metals market, Silver dropped 1.4% to $71.98 per ounce, and Platinum fell 0.9% to $1,970.38. Meanwhile, Palladium remained relatively stable, trading at $1,503.52.