Gold prices fell as traders scaled back expectations of a Federal Reserve rate cut, following stronger-than-expected U.S. jobs data.
Bullion was trading near $2,643 an ounce, still close to its record high of $2,685.58 reached late last month.
Yields on key U.S. Treasury bonds have returned to 4% after Friday’s U.S. jobs numbers dampened the chances of a major interest rate cut by the Federal Reserve in November. Money markets are now pricing in a cut of less than a quarter of a percentage point next month.
Low interest rates are often seen as supportive of non-interest bearing gold. U.S. inflation data due later this week could provide further clues on the path of interest rates.
Fed officials, including Alberto Musallam, are also scheduled to speak at events later Monday.
Up 28% this year
Gold prices have risen about 28% this year, hitting a series of all-time highs, with recent gains supported by optimism about interest rate cuts. The metal has also been supported by strong buying by central banks, as well as safe-haven demand amid ongoing conflicts in Ukraine and the Middle East.
Meanwhile, money managers cut their net bullish bets on gold to the lowest level in three weeks as of Oct. 1, according to data from the Commodity Futures Trading Commission on Friday.
“Gold and silver markets were net sellers as traders booked profits amid signs of fatigue in the metals’ rally,” Ole Hansen, head of commodity strategy at Saxo Bank, wrote in a note. “In gold, it is worth noting that both long and short positions were reduced as short sellers recently feared a geopolitically-driven rally, while longs continued to book profits.”
Spot gold was down 0.4% at $2,642.88 an ounce at 4:22 p.m. ET in New York. The Bloomberg Dollar Spot Index was flat, while the yield on 10-year U.S. Treasury notes rose. Palladium rose, while platinum and silver fell.
