PRECIOUS-Gold slips 1% as solid jobs data spurs rate hike bets

Adds details, updates prices

By Seher Dareen

June 3 (Reuters) – Gold prices fell on Friday, pressured by a stronger dollar and as better-than-expected U.S. jobs data raised concerns of aggressive monetary policy tightening.

Spot gold XAU= fell 1% to $1,848.67 per ounce by 1759 GMT, after earlier falling to $1,846.4. U.S. gold futures GCv1 settled down 1.1% at $1,850.2.

Data showed U.S. employers hired more workers than expected in May and maintained a fairly strong pace of wage increases, signs of labor market strength. nL1N2XP2AO

“If the Federal Reserve sees the economy continuing to remain stable in the midst of its rate raising efforts, they might feel more emboldened to raise rates at a faster pace,” said David Meger, director of metals trading at High Ridge Futures.

Higher U.S. interest rates increase the opportunity cost of holding gold, which bears no interest, while boosting the dollar in which bullion is priced. nL1N2XP1Q4

Cleveland Federal Reserve Bank President Loretta Mester said on Friday she was looking for “compelling” evidence that inflation has peaked, and if it hasn’t, September’s Fed meeting could see a 50 bps rate hike as well. nS0N2UR084

The dollar =USD edged up 0.3%, while U.S. benchmark 10-year yields US10YT=RR were close to the two-week high touched earlier in the session. USD/ US/

Gold prices were set to log a 0.3% dip for the week, despite the metal hitting its highest since May 9 at $1,873.79 earlier in the session.

The medium-term outlook for gold is positive, said Jigar Trivedi, a commodities analyst at Mumbai-based broker Anand Rathi Shares.

“Chinese market has reopened hence we don’t rule out retail participation and market is discounting June and July rate-hike events,” Trivedi added. nL1N2XP0DA

Spot silver XAG= fell 1.9% to $21.85 per ounce, down nearly 1% for the week.

Platinum XPT= was down 1.4% to $1,008.35, yet it was up 5.6% for the week, the biggest gain since Feb. 2022.

Palladium XPD= fell 3.4% to $1,983.20 and was down around 3.8% for the week.

(Reporting by Seher Dareen and Eileen Soreng in Bengaluru; Editing by Amy Caren Daniel and David Evans)

((Seher.Dareen@thomsonreuters.com; If within U.S. +1 646 223 8780;))