Gold Drops 0.8% and Heads for Weekly Loss After Weak US Jobs Data
Gold fell 0.8% to $4,145.68 per ounce and is heading for a weekly loss of around 3.3%, after rebounding above $4,200 following weaker-than-expected US jobs data.
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Spot gold prices fell 0.8% to $4,145.68 per ounce by 11:38 a.m. US Eastern Time (1538 GMT), closing in on a weekly loss of about 3.3%. US gold futures dropped 0.7% to $4,173.50, according to Reuters. The report attributed the pressure to a stronger dollar and rising Treasury yields, as 10-year and 30-year bond yields reached their highest levels since 2002 on Thursday.
The trend temporarily shifted following the release of September US jobs data, which showed nonfarm payrolls rising by just 29,000 compared to expectations of 90,000 in a Reuters poll, pushing gold to rebound above $4,200. The most active futures climbed 1.1% to $4,248 per ounce by 9:05 a.m. Eastern Time.
The weak jobs report pushed the unemployment rate up to 4.2%, while annual wage growth slowed to 3.0%, its weakest level since May 2021, and August data was revised down to 133,000 from 162,000. The probability of an October rate hike dropped to around 20%, while December odds remained above 80%. The 10-year US Treasury yield fell 6 basis points to 5.17%, but remained just 17 basis points below the 24-year high of 5.34% recorded on Thursday.
The US Dollar Index fell 0.1% to 101.86 but remained on track for a third weekly gain, while silver rose 1.19% to $61.72. Investors in the region are closely watching these moves, as gold serves as a primary safe haven for households and institutions, and because the path of US interest rates determines the opportunity cost of holding the metal compared to yield-bearing assets.
What do these terms mean?
Treasury Bonds: Debt instruments issued by the US government; a rise in their yield signifies higher borrowing costs in the economy. Ounce: A global unit of measurement for weighing gold, equivalent to approximately 31.1 grams. Futures Contracts: Agreements to buy or sell an asset at a predetermined price at a future date. Dollar Index: A measure of the US dollar's value relative to a basket of major currencies. Basis Point: Equals 0.01% in interest rates and yields.
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