By Gina Lee
Investing.com – Gold was down on Monday morning in Asia after lower-than-expected U.S. nonfarm payrolls data released on Friday eased investors’ concerns that the U.S. Federal Reserve would tighten its current dovish monetary policy.
edged down 0.12% to $1,889.75 by 12:04 PM ET (4:04 AM GMT). The , which usually moves inversely to gold, inched up on Monday while the benchmark slipped below 1.6%.
Data released on Friday said that in May increased to 559,000, higher than April’s 278,000 reading but below 650,000 figure in forecasts prepared by Investing.com. The lower-than-expected figure eased investors’ concerns about potential runaway inflation and earlier-than-expected interest rate hikes.
Meanwhile, U.S. Treasury Secretary Janet Yellen said on Sunday that U.S. President Joe Biden’s $4 trillion spending plan would be good for the U.S. even if it results in inflation that persists into 2022 and interest rate hikes.
“If we ended up with a slightly higher interest rate environment it would actually be a plus for society’s point of view and the Fed’s point of view,” Yellen told Bloomberg.
Some investors remained cautiously optimistic.
“We are seeing some long covering in Asia today, with risk hedges being unwound after an uneventful news weekend, helped by a slightly stronger dollar and with rallying… although gold has corrected in recent sessions, the bullish fundamentals remain in place. Only a sharp steepening of the U.S. yield curve is likely to change that,” Jeffrey Halley, OANDA senior market analyst, told Reuters.
Investors now await the European Central Bank’s policy decision, due to be handed down on Thursday. The Fed is also scheduled to meet from Jun. 15 to 16.
On the demand front, India, the second-largest gold consumer globally, posted the biggest discounts in eight and a half months last week as the number of COVID-19 cases in India topped 28.8 million as of Jun 7, according to Johns Hopkins University data.
In other precious metals, silver dropped 0.7% and palladium fell 0.3%, while platinum edged up 0.2%.
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