Gold Dips $10 Amid Strong U.S. Labor Data; China`s Forex Reserves Surge

Published on Jan 08, 2024 13:05

Gold experienced a more than $10 drop in early Asia electronic trades, extending losses from the previous session. This decline comes as stronger-than-expected U.S. labor data prompted a reconsideration of early interest rate cut expectations. Simultaneously, China`s foreign exchange reserves, the world`s largest, unexpectedly rose by $66 billion to $3.238 trillion in December, the most significant increase since December 2021. The surge was fueled by a 0.52% rise of the yuan against the dollar and a 2% decline of the dollar against other major currencies. China`s gold holdings reached 71.87 million ounces, valued at $148.23 billion by the end of December. Despite this, the yellow metal closed 2023 with over 10% in gains. Market attention is now focused on the upcoming U.S. Consumer Price Index (CPI) inflation data for December, with traders adjusting expectations for a March rate cut, showing a 63% chance, down from over 73% last week. MCX February bullion futures traded at Rs 62,200, down Rs 357 per 10 grams.