Gold fell below $1,900 an ounce for the first time in three months after US unemployment data pointed to a robust labor market, giving the Federal Reserve more room to tighten policy.

Initial jobless claims unexpectedly fell by 26,000 to 239,000 last week, marking the biggest weekly decline since 2021, according to Labor Department figures. Treasury yields spiked following the report, putting pressure on bullion which bears no interest.

The data will strengthen the case the Fed will keep hiking interest rates to cool inflation. The prospect has seen gold decline about 8% since peaking in early May, with the resolution of the debt-ceiling standoff also adding to selling pressure on the metal.

Fed policymakers could potentially raise rates in July and September to curb inflation, Chairman Jerome Powell said Wednesday at a conference in Madrid. Still, concerns are lingering that the US central bank may have to reverse course in the event of a slowdown, which would support gold.

Opinion among policymakers is also not uniform. On Thursday, Atlanta Fed President Raphael Bostic reiterated that he favors keeping borrowing costs on hold.

Spot gold fell 0.5% to $1,897.06 ounce as of 9:06 a.m. in New York, after retreating 0.3% on Wednesday. The Bloomberg Dollar Spot Index strengthened 0.2%. Silver, platinum and palladium all fell.

Source: Bloomberg