Gold experienced a rollercoaster week, hitting a seven-month low before rebounding to end the day higher, but still posted a weekly loss. The precious metal faced a challenging environment due to expectations of another Federal Reserve rate hike, driven by strong U.S. jobs data, which boosted Treasury yields and the U.S. dollar.
The most-active futures contract for gold on New York’s Comex, December, closed Friday’s trading session up $13.40, or 0.7%, at $1,845.20 per ounce. Earlier in the day, it reached a seven-month low of $1,823.55.
The spot price of gold, which is closely monitored by some traders, was at $1,831.70 by 15:00 ET (19:00 GMT), up $11.44, or 0.6%, on the day. Spot gold had earlier hit a seven-month low of $1,810.47.
For the week, both Comex gold and the spot price registered losses due to the increased selloff in bonds and the rally in the U.S. dollar this month.
December gold fell by 1.1% for the week, following a 3.1% drop the previous week.
Spot gold recorded a weekly loss of nearly 1% after tumbling 4% in the preceding week. This was the most significant weekly drop since June 11, 2021, when gold plunged by almost 6%.
Analysts are monitoring support levels, with some suggesting that spot gold could reach the $1,750 range. They note that central banks may use these lower levels to accumulate significant quantities of gold.
Despite robust U.S. jobs growth in September, gold did not experience the expected significant selloff immediately. However, analysts remain cautious and suggest that any rebound in gold prices may not be sustained.
The U.S. Labor Department reported 336,000 new non-farm payrolls for September, well above expectations and previous figures. This reinforced the move higher in Treasury yields, contributing to the challenges faced by gold.
While gold rebounded on the day, the U.S. dollar remained strong, albeit slightly off recent highs, and yields reached new 16-year highs, further adding to the volatility in the precious metal market.
Looking ahead, gold’s performance may continue to be influenced by developments in the broader macroeconomic environment, particularly movements in Treasury yields and the U.S. dollar.