Gold Prices Weaken Ahead of US Payrolls Report

Gold prices are weakening ahead of the closely watched September U.S. nonfarm payrolls report, with spot gold down over 3% for the week at $4,154.78.

The stronger dollar and Treasury yields at their highest levels in years are adding pressure to non-yielding metals across the complex.

According to Kyle Rodda, senior financial market analyst at Capital.com, investors are tracking U.S. rate expectations and geopolitical developments in the Middle East.

A stronger-than-expected payrolls reading could lift the chances of Fed rate hikes and weigh further on gold, while data released on Wednesday shows U.S. inflation increased less than expected in August.

Traders are pricing in only about a 25% chance of a rate hike this month, versus about 70% earlier in the week, with still seeing a 79% chance of an increase in December.