Gold Prices Plummet as Stronger Dollar and Higher Yields Weigh on Metal

Gold prices tumbled on Friday, reversing earlier gains, as a stronger US dollar and rising Treasury yields weighed heavily on the non-yielding metal. Spot gold fell 0.8% to $4,145.68 per ounce by 11:38 a.m. EDT (1538 GMT), setting it up for its first weekly decline in some time.

The downtrend was also reflected in other precious metals, with US gold futures down 0.7% at $4,173.50 and silver falling 1.1% to $60.17 per ounce. Platinum retreated 1.9% to $1,692 and palladium declined 0.4% to $1,166.25.

The move lower came despite earlier gains for gold after data showed US job growth slowed more than expected in September. However, economists had forecast a significant increase in payrolls, which may have contributed to the downward revision in expectations for a rate hike later this month.

According to Han Tan, chief market analyst at Bybit, 'gold bugs are perhaps refusing to get carried away for the time being, knowing that the Fed retains a hawkish bias.' This sentiment is echoed by Marex analyst Edward Meir, who noted that 'the charts still look fairly grim and (gold) could push lower still if the rate cycle resumes its ascent.'

The latest inflation data and opposition from top policymakers to another rate hike in October have strengthened investor bets that the US Federal Reserve will keep rates on hold later this month. As a result, traders currently see only about 22% chance of a US rate hike this month.