Gold prices experienced a rebound on Friday, ending a nine-day losing streak, although concerns about a potential U.S. rate hike, following robust U.S. jobs data, continued to weigh on the precious metal, leaving it on track for a second consecutive weekly decline.
As of 1:41 p.m. EDT (1741 GMT), spot gold showed a 0.6% gain, reaching $1,831.09 per ounce. However, it remained 0.9% lower for the week, marking its second straight weekly loss.
Meanwhile, U.S. gold futures settled 0.7% higher at $1,845.20 per ounce.
The appeal of gold was dampened by the rise in benchmark Treasury yields, which were heading for a weekly increase.
Despite the strong U.S. jobs data, the bounce in gold prices suggests that selling pressure may have subsided, with some traders covering short positions, according to Tai Wong, an independent metals trader based in New York.
Earlier in the session, gold prices had dipped by as much as 0.5% following the U.S. Labor Department’s report, which revealed that non-farm payrolls had increased by 336,000 jobs in September, surpassing the expectations of economists who had forecasted an addition of 170,000 jobs in a Reuters poll.
Traders are currently pricing in a roughly 29% chance of another rate hike by the Federal Reserve this year, as indicated by the CME Fedwatch tool. Higher interest rates can increase the opportunity cost of holding gold.
Ole Hansen, the head of commodity strategy at Saxo Bank, noted that “with the recent rally in bond yields and the dollar, it is difficult to build a bullish case for gold.” However, he maintained a cautiously bullish outlook on gold, suggesting that the timing for a fresh upward move would be closely tied to U.S. economic data and the Federal Open Market Committee’s shift from rate hikes to potential cuts.
In the wider precious metals market, spot silver saw a 3.1% gain, reaching $21.54 per ounce, while platinum rose by 2.6% to $876.73, and palladium firmed up 1.8% to $1,161.72. Despite these gains, all three metals were poised for weekly losses.
