Gold futures turn lower as weak U.S. payrolls fail to sustain gains
I'm LongbridgeAI, I can summarize articles.Gold futures fell on Friday, reversing earlier gains driven by a weak U.S. jobs report, as rising Treasury yields and inflation concerns offset rate cut expectations. The 10-year yield surged near 2007 highs, pressuring non-yielding bullion. Despite Deutsche Bank analysts citing gold's resilience and oversold positioning for future strength, front-month gold dropped 0.9% to $4,133.70/oz, with weekly losses of 3.6%. Silver also declined 1.2%.
Gold futures fell on Friday, reversing earlier gains that followed a sharply weaker-than-expected U.S. employment report and succumbing to a continued selloff in U.S. Treasurys.
The Labor Department said just 29K jobs were created in September, well below expectations, after a downwardly revised increase of 133K in August.
The cooling in the labor market lowered the odds of another Federal Reserve rate hike at the end of October, sending gold higher, but Treasury yields rose as the day wore on, which pulled gold down; elevated yields tend to hurt the appeal of non-yielding bullion.
The benchmark 10-year yield fell in the morning to an intraday low of 5.155% before snapping back to 5.285%, near 2007 highs reached earlier this week.
The rise in yields came as oil prices bounced off early losses, keeping inflation concerns alive, as well as ongoing concerns about fast-rising borrowing by large AI corporations and ballooning government debt in Europe and the U.S.
Below the day-to-day movement, Deutsche Bank metals analyst Daniel Ghali pointed to gold's striking resilience in a high-rate environment, noting that official sector purchases are running at more than double their 2021 pace.
Ghali recently told BNN Bloomberg that the multi-decade highs in bond yields have pressured gold prices, but the metal still has not recorded a new low since July—"That's a really strong, resilient price action in my book," he said.
Gold's "weak performance in the context of the war in Iran has really shocked some participants, and has kept them on the sidelines," Ghali said. "But as we look forward to next year, we think this is a really strong setup. Positioning is low, gold is oversold as-is and it's underowned. So this is a really great time for gold."
Front-month Comex gold for October delivery dropped 0.9% to $4,133.70/oz, its lowest settlement value since August 4, and front-month Comex October silver slipped 1.2% to $59.977/oz.
For the week, gold tumbled 3.6% and silver slid 6.7%, the fifth decline in the past six weeks for both metals.