Gold Falls 1.2% as Dollar Rises, Rate Cuts Priced Out
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- Spot gold fell 1.2% to $4,620.68 per ounce, with U.S. gold futures for April delivery losing 0.7% to $4,647.10.
- The 10-year U.S. Treasury yield and dollar index both rose, pressuring greenback-priced bullion.
- Traders have almost completely priced out Fed rate cuts for this year, a sharp reversal from the two reductions expected before the Iran war began.
- Nonfarm payrolls jumped by 178,000 jobs in March — the most since December 2024 — with the unemployment rate falling to 4.3%, further reducing odds of monetary easing.
- Oil prices held above $110 per barrel as the U.S.-Israeli war with Iran continued disrupting global energy supplies, heightening inflation concerns that the Fed cannot ignore.
- Trump threatened to "rain hell" on Tehran if it did not reopen the Strait of Hormuz by Tuesday, though U.S. intelligence assessments suggest Iran is unlikely to reopen the waterway soon.
- COMEX gold speculators increased net long positions by 1,098 contracts to 93,872 in the week to March 31, a notable bullish signal even as spot prices declined.
Why it matters: With March payrolls surging by 178,000 and crude holding above $110, the Fed's path has shifted decisively hawkish — gold's traditional inflation-hedge role is being overpowered by the prospect of "higher for longer" rates, which dampen demand for non-yielding assets like bullion. Chicago Fed President Goolsbee called the timing of the oil shock "unfortunate," underscoring that sticky tariff inflation plus an energy spike leaves no room for cuts.
