Gold drops as strong US payrolls boost dollar, yields
GLD•Gold fell 0.3% to $4,074.36 an ounce after stronger-than-expected October payrolls boosted the dollar and Treasury yields, while remaining up 5.2% for the week.
1. Payrolls weigh on gold
Gold prices fell on Friday after stronger-than-expected US payrolls reinforced expectations that the Federal Reserve could keep interest rates higher for longer. Spot gold dropped as much as 1% to $4,033.29 before trading 0.3% lower at $4,074.36 an ounce; it was still up 5.2% for the week, its best weekly performance since August.
2. Rates and dollar rise
The dollar rose 0.7% to its highest level since October 29, and benchmark 10-year Treasury yields climbed. The unemployment rate fell to 4.1%, and traders saw an 81% chance of a Fed rate increase in December, up from 72.8% before the payrolls report. Higher interest rates raise the opportunity cost of holding non-yielding bullion.
3. Other metals gain
Lower prices encouraged Indian retail gold buying ahead of Diwali. Silver rose 0.8% to $52.18 an ounce and platinum gained 1.6% to $1,541.42, while palladium fell 0.6% to $1,024.59; all three were poised for weekly gains.
