Gold prices fell on Friday, with the precious metal heading towards its second consecutive weekly decline. A stronger US dollar and higher yields on US Treasury bonds put further pressure on gold prices, while investors awaited key US employment data for clearer indications about the Federal Reserve’s future interest rate policy.
According to Reuters, spot gold fell 0.6% to $4,154.78 per ounce, while gold has declined by more than 3% so far this week. US gold futures also fell 0.4% to $4,184 per ounce.
The US dollar is on track to gain this week, making dollar-denominated metals more expensive for investors holding other currencies.
Meanwhile, yields on 10-year and 30-year US Treasury bonds reached their highest levels since 2002 on Thursday, putting additional pressure on non-yielding assets such as gold.
Kyle Rodda, senior financial market analyst at KCM Trade, said market participants were closely monitoring expectations for US interest rates as well as geopolitical developments in the Middle East.
According to Rodda, US non-farm payroll data will be important for interest rate expectations, as a strong employment report could increase the likelihood of the Federal Reserve raising interest rates, potentially putting further pressure on gold prices.
The probability of an interest rate hike this month has fallen to around 25%, down from 70% at the beginning of the week. Meanwhile, the probability of a rate hike in December has risen to 79%.
Among other precious metals, silver fell 0.5%, platinum declined 0.4%, while palladium gained 0.1%. However, silver, platinum and palladium are also heading towards weekly declines.