Gold prices fell during these moments of trading, today, Monday, due to a slight rise in US bond yields, despite the stability of the dollar index.
Markets are awaiting Federal Reserve Chairman Jerome Powell's speech later this week for more clarity on interest rate expectations.
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Bonds bring down gold prices
“The main factor that will influence gold in the near term will be 10-year US Treasury yields,” said Kelvin Wong, chief market analyst for Asia-Pacific at OANDA. Therefore, if the bond market rebounds again, gold may fall below the key support level around $1974.
Yields on 10-year Treasury bonds rose to 4.5910% after hitting a five-week low on Friday, reducing the appeal of non-yielding bullion.
Data on Friday showed US job growth slowed in October, and the annual wage increase was the smallest in about two-and-a-half years, indicating easing labor market conditions.
The jobs report sparked expectations that the Federal Reserve had finished its campaign to raise interest rates, sending the dollar falling to its lowest level in six weeks. The report showed the number of non-farm payrolls rose by 150,000 in October, after a downwardly revised reading of 297,000 in September, and while the unemployment rate increased to 3.9%, monthly wage growth slowed.
Traders now expect a 95% chance that the US central bank will leave interest rates unchanged in December, and an 86% chance that the first monetary policy easing will come in June next year.
Investors are set to look for clues about the Fed's interest rate path this week, as at least nine Fed members will speak this week, including Jerome Powell's speech on November 9.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings rose 0.20% to 863.24 tons on Friday.
ETF holdings have increased by 1 million ounces in the past two weeks, as speculators cover short positions, ANZ analysts said in a note dated Friday. However, gold's performance depends on the end of the Fed's interest rate hike cycle.
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Gold at settlement on Friday
Gold prices turned higher at the settlement of trading, on Friday, to erase the week’s losses, after the dollar touched its lowest levels in more than 6 weeks, with investors reducing their bets on increasing interest rates, following data that showed a slowdown in inflationary pressures in the labor market in the United States.
Upon settlement, gold futures contracts for December delivery increased by 0.3%, or $5.7, at $1,999.2 per ounce, after touching $1,989.3, to end the week’s trading without change, following a series of gains that extended over 3 weeks.
Gold and the dollar at 10:30 AM Saudi time
Gold futures fell 0.46% to $1,990 an ounce.
Meanwhile, spot gold contracts fell by 0.47% to $1,983 per ounce.
On the other hand, the dollar index settled at 104.85 points.
other metals
Silver fell in spot transactions 0.2 percent to $23.14 per ounce, platinum fell 0.4 percent to $926.14, and palladium gained 0.5 percent to $1,124.46.
