Gold Falls as Strong Payroll Data Fuels US Rate Hike Expectations

Gold prices closed lower this Friday. The decline followed the release of the United States employment report, known as the payroll. The precious metal interrupted a two-day winning streak.

The market reacted to the rise in job openings during October, which surpassed initial projections. This scenario strengthened the dollar and pushed up yields on US Treasury bonds. The DXY index reached its highest level since late October.

The release of the employment data shifted investor bets regarding Federal Reserve monetary policy. The probability of a rate hike in December rose to 76.8 percent. Before the report was published, this estimate stood at 72.8 percent.

Analysts noted that risk aversion in the stock market contributed to the sell-off of gold positions. Investors sought to cover losses in other assets during the session. Despite the daily drop, the metal accumulated gains of 4.51 percent throughout the week.

A stronger dollar and the prospect of higher interest rates in the United States tend to reduce the appetite for safe-haven assets like gold. This global macroeconomic environment increases risk for high-volatility assets, including Bitcoin, by raising the opportunity cost of capital.