Gold ended Friday lower and was headed for a weekly decline as a stronger dollar over the week and elevated U.S. Treasury yields outweighed the initial support from soft employment data. Spot gold fell 0.9% to $4,140.06 an ounce, leaving it about 3.4% lower for the week.
U.S. gold futures settled 1% down at $4,162.30. Spot bullion had gained more than 1% earlier in the session after September nonfarm payrolls increased by only 29,000, far below the 90,000 expected by surveyed economists.
August payroll growth was revised to 133,000 from 162,000. The weaker figures encouraged traders to reduce the implied chance of an October Federal Reserve increase to about 22%, down from roughly 70% earlier in the week. That probability is market pricing, not a decision.
The decline despite lower near-term hike expectations reflected the broader rate environment. Ten- and thirty-year Treasury yields had reached their highest levels since 2002 on Thursday, raising the opportunity cost of holding a metal that produces no interest.
The dollar eased during Friday’s session but remained on course for a weekly gain. A firmer U.S. currency can make gold more expensive for buyers using other currencies, adding exchange-rate pressure to the effect of high bond yields.
Bullion has fallen more than 20% since the U.S.-Israeli war with Iran began in late February. Conflict can increase safe-haven demand, but in this period it also lifted inflation concerns and expectations that interest rates would remain high, producing an opposing force.
Other precious metals shared the weekly weakness. Spot silver fell 0.8% to $60.36, platinum dropped 2% to $1,692.90 and palladium declined 0.5% to $1,165.75. All three were heading for weekly losses.
The closing levels capture one session and one week rather than a durable trend. Gold’s next direction depends on whether weaker hiring changes the Fed’s reaction function, whether inflation moderates and whether long-term yields and the dollar retreat from elevated levels.
