Gold and Crypto Stocks Decline as Strong Jobs Data Boosts Fed Rate Hike Odds

Gold mining and cryptocurrency-related stocks slid in Friday trading after a surprisingly robust U.S. jobs report intensified expectations for tighter monetary policy from the Federal Reserve, pressuring non-yielding assets.

Jobs Report Exceeds Forecasts

The U.S. Labor Department reported that nonfarm payrolls surged by 162,000 last month, significantly outpacing the consensus forecast of 55,000. The resilient labor market data prompted an immediate repricing in interest rate expectations.

Following the release, traders in the Fed funds futures market increased the implied probability of a rate hike at the central bank's next meeting to 60%, up from 52% prior to the report, according to Investing.com. Market participants noted, however, that the upcoming Consumer Price Index (CPI) data will be a critical factor ahead of the Fed's decision.

Impact on Non-Yielding Assets

The prospect of higher interest rates tends to weigh on assets that do not offer a yield, such as gold and bitcoin. Strong economic data, like a robust jobs report, strengthens the case for a more hawkish Federal Reserve, which in turn raises the opportunity cost of holding these assets compared to interest-bearing instruments like government bonds.

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The decline in the spot prices for gold bullion and bitcoin subsequently dragged down the equities of companies with significant exposure to them.

Widespread Equity Declines

The sell-off was broad across both sectors. Major gold producers saw their shares fall, including:

• Barrick Gold Corp. (NYSE:GOLD)
• Newmont Corp. (NYSE:NEM)
• Agnico Eagle Mines (NYSE:AEM)

Crypto-linked equities faced similar headwinds. Notable decliners included bitcoin holder MicroStrategy Inc. (NASDAQ:MSTR), crypto exchange Coinbase Global Inc. (NASDAQ:COIN), and bitcoin mining firms such as Riot Platforms (NASDAQ:RIOT) and Marathon Digital Holdings (NASDAQ:MARA).