Mumbai, Oct 02 : Gold prices declined on Friday and were heading for a second consecutive weekly fall as a stronger US dollar and rising Treasury yields weighed on the precious metal. Investors remained focused on the upcoming US nonfarm payrolls report for indications about the Federal Reserve’s future interest-rate decisions.
Spot gold dropped 0.6% to $4,154.78 an ounce by 0205 GMT and was down more than 3% for the week. US gold futures also weakened, falling 0.4% to $4,184.
The dollar was on course for a weekly advance, making gold and other commodities priced in the US currency more expensive for international buyers. Meanwhile, yields on 10-year and 30 year US Treasury bonds reached their highest levels since 2002 on Thursday, adding further pressure to non-yielding assets such as gold.
Kyle Rodda, senior financial market analyst at Capital.com, said investors were monitoring expectations for US interest rates alongside developments in the Middle East.
He said the nonfarm payrolls figures would be important for determining the outlook for monetary policy. A stronger-than-expected jobs report could raise expectations of tighter policy and potentially put additional pressure on gold.
Two Federal Reserve policymakers also indicated this week that they wanted to see more economic data before supporting another interest-rate increase.
The September US nonfarm payrolls report was scheduled for release at 1230 GMT on Friday. Earlier data showed US consumer inflation rose less than economists had expected in August, while price pressures in the previous month were revised lower.
Market expectations for a rate increase this month had fallen sharply, with traders assigning roughly a 25% probability compared with around 70% earlier in the week. Expectations for a December increase remained considerably higher at about 79%.
Gold generally comes under pressure when interest rates and bond yields rise because the metal does not provide interest income.
Geopolitical developments also remained in focus. Sources said Iran was preparing a stronger response should the United States resume large-scale military strikes, even as Tehran continued diplomatic efforts that Iranian officials privately viewed as unlikely to produce a breakthrough.
Other precious metals also traded lower. Spot silver declined 0.5% to $60.53 an ounce, while platinum fell 0.4% to $1,716.93. Palladium edged up 0.1% to $1,172.80. Silver, platinum and palladium were all headed for weekly declines.