As of 0757 GMT, spot gold has slipped 0.1% to $1,932.28 per ounce, while U.S. gold futures are trading 0.1% lower at $1,967.60. Gold prices have experienced a decline of over 1.3% this week, reaching lows not seen since July 11, largely due to rising long-term U.S. Treasury yields. Economic data, including employment figures, have suggested easing inflation and strengthened the U.S. economy, leading to expectations that the Federal Reserve will continue to raise interest rates, which in turn weighs on gold prices.
Vandana Bharti, assistant vice-president of commodity research at SMC Global Securities, attributes gold’s weakened performance to the resilience of the U.S. economy, which has increased expectations of further interest rate hikes by the Federal Reserve. The focus now shifts to the upcoming Non-farm payrolls (NFP) data at 1230 GMT for more clues about the strength of the U.S. economy.
Tim Waterer, chief market analyst at KCM Trade, believes that for gold to rebound, there needs to be an adverse reaction of the U.S. dollar to the NFP figures. However, at the moment, gold is trading with limited volatility, mainly due to its comparative lack of yield attractiveness as rising bond yields make gold less appealing since it offers no interest.
The Bank of England’s warning on Thursday about higher borrowing costs also contributed to the decline in gold prices. On a technical basis, key near-term support for gold is identified at $1,925, with a fall below this level exposing the metal to its 200-day moving average at $1,895.
Other precious metals are also experiencing mixed performance. Spot silver has fallen 0.3% to $23.49 per ounce, while platinum remains nearly flat at $914.52, both headed for their third consecutive weekly loss. Palladium has dropped 0.7% to $1,250.23 but is set for a small weekly gain.
