El Salvador lawmakers overturn mining ban Bukele called absurd
El Salvador became the first country in the world to ban all forms of metals mining in 2017.
Gold prices slipped by more than 1% on Thursday, putting an end to its New Year rally, as the latest release of US labour market data boosted expectations of higher interest rates for longer.
Spot gold dropped 1.3% to $1,832.08 per ounce by 11:30 a.m. ET, retreating from a near seven-month peak hit in the last session. US gold futures also fell 1.3% to trade at $1,834.50 per ounce in New York.
[Click here for an interactive chart of gold prices]
Meanwhile, the US dollar index was up 0.9%, making gold more expensive for holders of foreign currencies. Benchmark 10-year yields were close to their session-highs.
“The strength in the dollar index and yields rising were weighing on gold,” Phillip Streible, chief market strategist at Blue Line Futures in Chicago, said in a Reuters note, highlighting that the Fed would continue to remain hawkish for longer as the labour market sees continued strength.
New data shows that the number of Americans filing new claims for unemployment benefits dropped to a three-month low last week while layoffs fell 43% in December, pointing to a tight labour market.
Atlanta Fed President Raphael Bostic on Thursday said US officials of the central bank “remain determined” to lower inflation back to its 2% target, while Kansas City Fed leader Esther George said the bank would need to press forward with rate rises.
The US economic outlook presented by Fed staff at last month’s meeting suggested that the battle to lower prices may last longer than anticipated.
Traders now await the US Labor Department’s nonfarm payrolls (NFP) data on Friday.
“If we get the same kind of ‘beats-expectations’ (report), we’ll probably see another extension lower on gold and silver —$1,805-$1,800 is your key level support,” Streible added.
(With files from Reuters)
