Gold prices fell to a near one-week low on Thursday as strong U.S. labor data dampened hopes of near-term Federal Reserve rate cuts, with a break below US$5,000 an ounce deepening losses as selling pressure intensified.
Spot gold slipped 2.8% lower to $4,938.69 per ounce by 01:42 p.m. ET (18:42 GMT). Bullion slipped to its lowest level since February 6 earlier in the session.
U.S. gold futures for April delivery settled 2.9% lower at $4,948.4 per ounce.
“Due to previous heightened volatility, a lot of people would have placed their stops either below $5,000 or above the $5,100 level just to preserve their stop positions,” said Fawad Razaqzada, market analyst at City Index and FOREX.com.
“Because of the downward move, those stops have been triggered below the $5,000 level, and that caused a cascading-like effect, causing prices to slump in a short period of time.”
Data released on Wednesday showed the U.S. job market began 2026 on firmer footing than expected, reinforcing the view that policymakers may keep rates elevated for longer.
Nonfarm payrolls rose by 130,000 jobs in January, following a downwardly revised 48,000 increase in December, while the unemployment rate edged down to 4.3%.
Initial jobless claims fell to 227,000 in the week ended February 7, data showed on Thursday.
Resilient labor market conditions reinforce the Fed’s confidence in the economy, allowing policymakers to maintain elevated rates to ensure inflation continues to ease. Bullion, in turn, is pressured by high interest rates due to its non-yielding nature.
Investors now await U.S. inflation data due on Friday for more cues on the Fed’s monetary policy path.
“It looks like the expectation is that headline CPI is going to slow from 2.7% to 2.5%, perhaps as low as 2.4%. That may revive some rate-cut bets and that would probably be favorable for gold,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Silver dropped 8.9% to $76.54/oz, after a 4% climb on Wednesday. Spot platinum shed 4.7% to $2,032.15/oz, while palladium lost 3% to $1,648.12.