Gold tumbled on Monday, stretching dips from the earlier week, as markets projections for soon interest rate cuts were reduced by combination of robust labor market figures and Fed’s hawkish stance.

Spot gold dropped 0.4% to $2,031.60 per ounce, while gold futures dipped 0.3% to $2,047.75 per ounce.

Gold saw a steep drop from a peak at $2,050 per ounce, as the possibility of longer-term interest rate increases signaled increased pressure in the immediate term.

The greenback staged a big rally on Monday, hovering close to the highest level touched in two months, on the other hand treasury yields climbed during the Asian trade.

Drops in yellow metal was primarily caused by a far better-than-anticipated January nonfarm payrolls figures, the US economy demonstrated sustained resilience, allowing Fed greater leeway to maintain higher interest rates for an extended period.

Higher interest rates increase the opportunity cost of purchasing bullion, therefore the possibility of higher rates for longer is not good for gold.