Gold Rebounds from a Two-Month Low.. What Changed the Equation?

Gold prices rose about 0.3 percent to $4,123.42 an ounce by 2:41 p.m. Eastern Time, after touching a two-month low in the previous session, while December gold futures on the Comex exchange closed up 0.4 percent at $4,157.

The decline in the previous session came after a stronger dollar and higher Treasury bond yields weighed on the yellow metal, a trend that began to reverse following the release of labor market data. U.S. jobless claims reached a seasonally adjusted 197,000 in the week ending October 3, below expectations of 200,000, reinforcing the conviction that the Federal Reserve has room to keep monetary policy tight.

A strong auction of 30-year Treasury bonds helped yields pull back from their morning highs, providing the metal with some support near the end of the session. A $22 billion auction of the same bond was the session's key risk event.

Reuters reported that investors are weighing an unclear interest rate path against concerns over rising U.S. debt, while reports suggested that a strong dollar and bond yields above 5 percent overshadowed market anxieties regarding debt and tensions near the Strait of Hormuz. Meanwhile, silver fell sharply in early U.S. trading.

What Do These Terms Mean?

Ounce: A global unit of measurement for precious metals weight, equal to approximately 31.1 grams, used to price gold in markets.

Futures Contracts: An agreement to buy or sell a commodity at a specified price today with execution at a later date, used by traders for hedging or speculation.

Bond Yield: The return earned by a bondholder from its interest relative to its current price, rising when bond prices fall in the secondary market.

Jobless Claims: The number of Americans filing new claims for unemployment benefits weekly, monitored as an early indicator of labor market health.