Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold tumbled 2.7% to close just above $1,164, its lowest this year, as a robust nonfarm payrolls report increased speculation that the Fed will raise interest rates in June, rallying the dollar and causing most asset classes to sell off.

The economy added 295,000 jobs in February, reducing the unemployment rate to 5.5%, the lowest in almost seven years. While most industries increased hiring, wage-growth remained subdued at just 2% over the past year, down from 2.2% in January, just two-thirds the rate typical of strong economic expansions.

The report is seen as adding to pressure on the Fed to increase interest rates in June, despite a recent wave of subpar economic data that includes falling factory orders, dropping productivity, rising jobless claims, and moribund inflation. Responding to rising rate speculation, the dollar soared against major rivals, with the ICE dollar index adding 1.4%. U.S. stocks and bonds fell sharply on the expectation of tighter monetary policy, with the Dow plunging 1.5%, or 260 points, while the S&P 500 lost 1.4%.

The rising dollar put pressure on gold and other commodities denominated in it for international trade. Oil plummeted more than 3.2%. Silver lost 2.2% while platinum and palladium shed 1.8% and 0.8%, respectively.

At the Comex close: April gold tumbled $31.90 to $1,164.30; March silver lost 35 cents to $15.81; April platinum plunged $21.30 to $1,158.80; and March palladium shed $6.90 to $818.15.