Gold, silver and crypto fell sharply after stronger-than-expected US jobs data pushed investors to price in a greater chance of another Federal Reserve rate hike.
The US economy added 162,000 jobs in August, nearly three times the roughly 56,000 expected, while unemployment remained at 4.1%. Average hourly earnings also increased 0.3%.
Related: US Adds 162,000 Jobs in August as Unemployment Holds at 4.1%
$835 Billion Wiped From Market Value
According to an estimate from Bull Theory, around $835 billion was erased from the combined market value of gold, silver and crypto within 25 minutes of the jobs report.
However, the figure is a social-media estimate rather than an official measure of realized investor losses. Brave New Coin separately noted that falling market capitalization and actual losses from completed trades are not the same thing.
Gold fell 1.1% to around $4,423, after briefly dropping below $4,365. Silver fell from roughly $67.10 to $65.07 before recovering slightly.
The broader crypto market also dropped to around $2.64 trillion, while Bitcoin fell below $80,000, losing about $1,600 within three minutes at one point.
Why Good Jobs Data Hurt Markets
The jobs report was positive for the US economy, but it created a problem for markets.
A strong labor market gives the Federal Reserve less reason to cut interest rates and could increase the possibility of another hike if inflation remains high.
Higher rates usually push bond yields and the dollar higher, making non-yielding assets such as gold and silver less attractive while also reducing appetite for riskier assets such as Bitcoin and other cryptocurrencies.
Investor takeaway: The selloff shows how sensitive markets remain to Fed expectations. Strong economic data may be good for the economy, but if it increases the chance of higher interest rates, it can quickly put pressure on gold, silver and crypto.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
