After climbing to its highest point in almost a year, gold took a plunge: a strong U.S. jobs report sent the metal from $2,568.77 down to $2,497.87 — a 2.71% drop — as investors read the data as room for more rate hikes.
Central banks, pulling in different directions
Canada’s central bank signalled a pause after its January hike. U.S. Fed Chair Jerome Powell called that a risky proposition and declined to follow — raising the Fed rate to 4.75% and signalling more to come, possibly as high as 5.25%.
“It’s very difficult to manage the risk of doing too little and finding out in six or 12 months that we actually were close but didn’t get the job done and inflation springs back,” Powell said.
The wildcards
Beyond rates, inflation and gold prices still answer to the war in Ukraine and the pandemic’s long tail — both of which the Fed itself named as contributing forces.
Rate-watcher’s rule: higher rates make yield-bearing assets shine and gold dim; pauses and cuts do the reverse. Most short-term gold moves are just this rule playing out.
Whatever the Fed does next, our offers track the live market — get today’s price for your gold.
