Gold experienced a tumultuous week as it hit seven-month lows before staging a late-week rebound, closing the week lower overall. The precious metal faced headwinds as concerns over potential Federal Reserve rate hikes were amplified by robust US jobs data, triggering surges in Treasury yields and the US dollar.
On Friday, the most-active gold futures contract for December on New York’s Comex settled at $1,845.2 an ounce, marking a gain of $13.40 (0.7%) after earlier hitting a seven-month low of $1,823.55.
The spot price of gold, closely monitored by some traders, stood at $1,831.70 by 15:00 ET (19:00 GMT), representing a $11.44 (0.6%) increase for the day. Spot gold had reached a seven-month low of $1,810.47 earlier in the trading session.
For the week, both Comex gold and the spot price registered declines, reflecting the heightened sell-off in bonds and the rally in the US dollar that characterized much of October.
December gold, which had fallen by 3.1% in the preceding week, declined a further 1.1% during the current week.
Spot gold, which experienced a 4% loss in the prior week, the most significant drop since June 11, 2021, witnessed a further slide of almost 1% this week.
Sunil Kumar Dixit, a technical analyst for gold at SKCharting.com, commented, “I think the bears will eventually push the spot price to $1,700 territory as global central banks are waiting to accumulate big chunks of gold at between the support levels of $1,760 to $1,750.” He expressed doubts about the sustainability of the current rebound, saying, “I think whatever rebound you’re seeing now won’t last.”
The US Labor Department’s report of 336,000 new non-farm payrolls for September, the highest since January’s 517,000, surpassed expectations, significantly exceeding the 187,000 figure seen in August and the average forecast of 170,000 by Wall Street economists for the same month.
Economist Adam Button highlighted the impact of this robust jobs data, stating, “This is a problem as it validates the recent move up in Treasury yields.”
The US Dollar Index, which compares the greenback against six other major currencies, stood just below 106.4, reflecting a gain for the day but still down from the 11-month high of 107.35 earlier in the week.
Yields, measured against the US 10-year Treasury note, reached a new 16-year high of 4.892, further contributing to the challenging environment for gold.
