Gold prices fell on Friday as a stronger dollar and high yields pressured
Quick Look
- Gold prices fell 0.9% on Friday to $4,140.06 an ounce as a stronger U.S. dollar and high U.S.
- Treasury yields put pressure on the non-yielding gold.
- Spot gold is down about 3.4% so far this week.
AI-generated summary
Why It Matters
As a traditional safe-haven asset, the price of gold is usually affected by the trend of the US dollar, real interest rates and geopolitical events. Recent U.S. employment data has been weak, but Treasury yields remain high, indicating that the market is divided on the outlook for inflation and interest rates.
Gold prices fell on Friday (2nd). (AP)
[Financial Channel/Comprehensive Report] Gold prices fell on Friday (2nd), giving up earlier gains. The strength of the U.S. dollar and high U.S. Treasury yields put pressure on gold, which does not yield interest, causing gold prices to end lower this week.
Spot gold fell 0.9% to $4,140.06 an ounce, and is down about 3.4% so far this week.
Please read on...
U.S. gold futures ended down 1% at $4,162.30 an ounce.
U.S. 10-year and 30-year Treasury bond yields rose to their highest levels since 2002 on Thursday (1st). In addition, U.S. data showed that employment growth in September was lower than expected. Gold prices rose by more than 1% earlier before turning lower.
The employment report released by the U.S. Department of Labor on Friday showed that U.S. non-farm employment increased by 29,000 people last month, and the increase in August was revised down to 133,000 from the originally announced 162,000. Economists polled by Reuters had expected nonfarm payroll employment to increase by 90,000 in September.
Han Tan, chief market analyst at Bybit, said: "Gold bulls may be reluctant to be overly optimistic at the moment because they know that the Fed will still maintain a hawkish stance." "In the next few months, the price trend of gold will largely depend on how much weakness the Fed is willing to tolerate in the labor market. At the same time, the Fed remains firmly focused on lowering U.S. inflation."
Gold prices have fallen more than 20% since the United States and Israel launched war against Iran in late February, with market expectations that inflation caused by the conflict could keep interest rates high for longer, putting pressure on gold prices.
The latest inflation data, which was lower than expected and at least two top Fed policymakers opposed raising interest rates again in October, have strengthened investor bets that the central bank will keep interest rates unchanged later this month.
According to the Chicago Mercantile Exchange's (CME) FedWatch tool, traders currently believe the chance of the Fed raising interest rates this month is about 22%, compared with about 70% earlier this week.
In terms of other precious metals, spot silver fell 0.8% to US$60.36 per ounce; platinum fell 2% to US$1,692.90 per ounce; palladium fell 0.5% to US$1,165.75 per ounce. All three precious metals also ended lower this week.
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What to Watch
AI outlook — possibilities, not facts
The Fed will keep interest rates on hold later this month
Very likely · Within weeks
Open Questions
- When will the Fed shift to easing policy?
- Will the conflict in the Middle East escalate further?
- When will real interest rates begin to decline significantly?
