Gold Dips on Rising US Yields Despite Weak Jobs Data

Gold prices closed last week at $4,142 per ounce, marking a second consecutive week of losses. The decline was driven by rising US Treasury yields, which offset the potential benefits of weaker-than-expected US labor market data. Despite the US economy adding only 29,000 non-farm jobs in September, far below expectations of 90,000, the unemployment rate ticked up to 4.2% from 4.1%. This data reinforced expectations that the Federal Reserve would likely hold interest rates steady at its next meeting.

The rise in Treasury yields, however, limited the impact of the weak employment figures on the US dollar and gold prices. Higher yields increase the opportunity cost of holding gold, a non-yielding asset. Investors are reassessing expectations for US monetary policy amid persistent inflation concerns, particularly after the Federal Reserve raised rates by 25 basis points in September to a range of 3.75% to 4%. The US dollar’s strength also played a role, making gold more expensive for international buyers.

Looking ahead, markets will watch key US economic indicators, including the services sector index, minutes from the Federal Open Market Committee meeting, and consumer confidence data. These could provide further insight into the labor market’s slowdown and its implications for monetary policy. Technically, gold faces resistance at $4,200 per ounce, with support levels at $4,100 and $4,000. Movements in the US dollar, Treasury yields, energy prices, and geopolitical developments will continue to shape gold’s trajectory.

Locally, the price of 24-karat gold reached approximately KD 41.460 per gram ($134), while 22-karat gold stood at around KD 38 per gram ($123). Silver prices hit about KD 657 per kilogram ($2,133).