Gold (GOLD) prices fell close to 1% just before the start of the session on Wall Street following a stronger-than-expected reading of US employment data. In the wake of a sharp drop in the unemployment rate, the U.S. dollar appreciated against other currencies, which directly put pressure on bullion prices. In addition to gold losing 1%, silver (SILVER) also saw sizable declines, losing more than 2% on an intraday basis.
Bankers' comments after the NFP report:
BMO Capital Markets:
"Overall, it was a strong report, which predictably reduced the chances of a March cut to <50%."
"The data definitely resonates with the rhetoric that the tightening cycle may not be over, even if it is considered unlikely, and that it is premature for officials to talk about easing. In short, the data increases the likelihood of a longer-than-usual plateau on interest rates."
Mohamed El-Erian, chief economic advisor at Allianz and Bloomberg Opinion columnist
"A significant increase in employment, higher wage growth and higher labor force participation were observed," he said. "The market needs to think very carefully about the size of the cuts next year."