NFP above expectations, Gold Steadied

Gold steadied after news of a better-than-expected NFP rate combined with U.S. President Joe Biden’s $2.25 trillion infrastructure spending plan.

Swift vaccination rollouts and lessening business restrictions boosted the labor market recovery. The boost resulted in U.S. employers adding the highest number of jobs in the last seven months and most industries showing improvement in March. Last month, nonfarm payrolls went up by 916,000 while the February rate was revised to a 468,000 increase according to the NFP report that came out on Friday by the Labor Department.

Gold posted its first 3-month decrease since 2018. Rising bond yields and pandemic-recovery sparked optimism have caused investors’ interest in the precious metal to drop. Gold-backed exchange-traded funds fell to their lowest levels since May and hedge fund managers’ bullish gold expectations fell to a three-week low.

Analysts expect demand for gold to drop as the global economy is returning to pre-pandemic levels swiftly. The positive shift was evident in the latest U.S. jobs report. They expect persistent selling pressure on gold for now.

What to watch closely for:

At the same time, Republicans’ opposition over Biden’s $2.25 trillion infrastructure proposal and the support they expressed for a smaller plan has investors keeping a close eye on the talks. Trading is expected to be lower today, Monday as markets around the world including Australia, China, and Hong Kong are closed for holidays.

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