Gold skidded as much as 4.4% to a more than four-month low on Monday as robust US jobs data stoked fears that the Federal Reserve would raises rates quicker than expected, increasing the opportunity cost of holding non-interest bearing bullion.
US gold futures slipped 2.1% to $1,726.40.
Gold prices broke below their bull-market defining trendline for the first time since 2019, fuelling significant stop-outs and melting gold’s prices, TD Securities said in a note.
US employers hired the most workers in nearly a year in July and continued to raise wages, giving the economy a powerful boost as it started the second half of what many economists believe will be the best year for growth in almost four decades.
The data underscored remarks by Fed officials suggesting a sooner than anticipated roll-back of pandemic-era stimulus on the back of a solid labour market recovery.
The data boosted the dollar and benchmark US 10-year Treasury yields, hurting gold’s appeal as an inflation hedge.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell to 1,025.28 tonnes on Friday, from 1,027.61 tonnes on Thursday.
India’s physical gold market flipped into a small premium last week for the first time in a month as prices eased although activity was still subdued.
Silver slumped as much as 7.5% hitting a more than eight-month low of $22.50 per ounce earlier in the session. It was last down 2.6% at $23.70.
Platinum fell 1.5% to $965.50, having earlier hit a low since November 2020 of $959.93.
Palladium rose 0.2% to $2,633.35.