Gold prices fell on Friday and were on track for a second straight weekly decline, pressured by a firmer US dollar and elevated Treasury yields, while investors awaited key US payrolls data for clues on the Federal Reserve’s policy path.
Spot gold fell 0.6% to $4,154.78 per ounce by 0205 GMT and was down more than 3% for the week so far. US gold futures lost 0.4% to $4,184.00.
The US dollar was headed for a weekly gain, making greenback-priced metals more expensive for holders of other currencies, while yields on 10- and 30-year Treasuries hit their highest levels since 2002 on Thursday.
“Market participants are watching US interest rate expectations and geopolitical developments in the Middle East,” said Kyle Rodda, senior financial market analyst at Capital.com.
“US nonfarm payroll data will be critical for rate expectations. If it comes in hot, it may increase the likelihood of rate hikes by the Fed. That would potentially weigh even further on gold prices.”
Two Fed policymakers this week staked out an unusually clear case for taking in more data before deciding about another rate hike.
The September US nonfarm payrolls report is due at 1230 GMT. Data on Wednesday showed that US inflation increased less than expected in August, and that price pressures were more moderate in the prior month than previously reported.
Traders are pricing in only about a 25% chance of a rate hike this month, versus about 70% earlier in the week. They still see a 79% chance of a rate increase in December.
Higher borrowing costs typically diminish gold’s attractiveness, given that it pays no interest.
Elsewhere, Iran is preparing a broader and more forceful response if the United States resumes large-scale military attacks, sources said, while continuing a diplomatic push that Iranian officials privately see as unlikely to succeed.
Spot silver fell 0.5% to $60.53, platinum slipped 0.4% to $1,716.93 and palladium rose 0.1% to $1,172.80. All three metals were poised for weekly losses.
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