Stronger Than Expected US Payrolls Pressure On Friday

Gold is 0.4% lower in the Asia-Pac session, after closing 0.7% lower at $2039.76 on Friday.

• Bullion came under firm pressure as the USD soared after a strong US Payrolls Report. The employment report showed a broadly higher-than-expected Change in Nonfarm Payrolls: Total +353k vs +185k est. (prior up-revised to +333k from 216k) and Private +317k vs +170k est. The Unemployment Rate was 3.7% vs 3.8% est., while the Labour Force Participation Rate was near steady at 62.5% vs 62.6% est.
• The 2-year US Treasury yield shunted 16bps higher to 4.36%, the largest daily move since March 2023. 10-year yield increased 14bps to 4.02%, marking a sharp reversal from the 2024 low of 3.81%, seen in the lead-up to the FOMC. The sell-off has continued in today's Asia-Pac session.
• The large upside surprise to US payrolls pushed back the prospect of rate cuts by the Federal Reserve until later in the year—March's chance of a 25bp cut declined to 20% from 38% pre-data. May has a cumulative 23bps of easing, while June has a cumulative 45bps.
• Nevertheless, the precious metal held onto gains for the week, with a high of $2065.48, buoyed by US retaliatory Middle East strikes. Support is seen at $2033.0 (20-day EMA), according to MNI’s technicals team.