Gold fell 1% on Thursday as stronger-than-expected U.S. payrolls data reinforced expectations that the Federal Reserve is unlikely to cut interest rates as quickly as previously anticipated, denting the metal's appeal.

Spot gold fell 1% to $3,323.49 an ounce by 11:02 a.m. EDT (1502 GMT), while U.S. gold futures fell 0.8% to $3,333.

The dollar (.DXY), opens a new tab and U.S. stock index futures rose after nonfarm payrolls increased by 147,000 jobs last month, the Labor Department's Bureau of Labor Statistics said. Economists polled by Reuters had forecast payrolls rising by 110,000.

A stronger dollar makes bullion more expensive for overseas buyers. "The better-than-expected jobs number means we see a smaller likelihood of a Fed rate cut earlier than currently anticipated. As a result, the dollar is strengthening, which is adding pressure on the gold market," said David Meger, director of metals trading at High Ridge Futures. "The key is the fact that the idea or possibility of a rate cut in July is unlikely."

Investors are now pricing in a 51 basis point Federal Reserve rate cut by the end of the year, starting in October, down from about 66 basis points expected before the report. Non-yielding gold tends to perform well in a low-interest environment.

On the trade front, a deal between the United States and Vietnam was announced on Wednesday ahead of a July 9 deadline for U.S. tariffs to take effect.

Meanwhile, Republicans in the U.S. House of Representatives are pushing Trump's massive tax-cutting and spending bill, which is expected to add $3.4 trillion to the national debt, toward a final yes-or-no vote. "As U.S. debt continues to rise, investors may become more concerned about the U.S. dollar, which should benefit gold in the long term," said Carsten Menke, an analyst at Julius Baer.

Spot silver rose 0.1% to $36.61 an ounce, while platinum fell 4% to $1,362.02 and palladium fell 1.5% to $1,137.45. (alg)

Source: Reuters