(Kitco News) The gold market saw significant losses Friday as the precious metal dropped $50 on the day following a shockingly solid employment report out of the U.S. The U.S. economy added a staggering 517,000 jobs in January as the unemployment rate dropped to 3.4% — the lowest level since 1969. This took many by surprise as market consensus calls were looking for just 185,000 new positions.
On top of that, the U.S. service sector beat expectations in January, rising to 55.2% after a contraction in December, according to the latest data from the Institute of Supply Management (ISM).
“Today’s data irked the Federal Reserve, which was fairly confident about inflation trends. This service sector is still too strong. And it is going to keep wage pressures elevated,” OANDA senior market analyst Edward Moya told Kitco News.
After raising rates at a slower pace of 25 basis points on Wednesday, Fed Chair Jerome Powell talked about disinflation progress. “It is gratifying to see the disinflationary process now getting underway,” he said.