Gold Slips as Rising US Yields Offset Weak Job Data

Gold prices closed last week lower at $4,142 per ounce, marking the second straight week of declines. The drop came despite weaker-than-expected US labor market data, as rising US Treasury yields continued to pressure the precious metal. The US economy added just 29,000 non-farm jobs in September, far below expectations of 90,000, while the unemployment rate ticked up to 4.2%. This data reinforced expectations that the Federal Reserve would likely keep interest rates unchanged at its upcoming meeting.

However, the impact of the weaker employment figures was limited by the rise in Treasury yields, which increased the opportunity cost of holding gold. Dar Al-Sabaik Company noted that higher yields and a stronger US dollar, which makes gold more expensive for other currency holders, remain key factors weighing on gold prices. The Federal Reserve's recent interest rate hike to a range of 3.75 to 4% has also influenced market sentiment.

Investors are now focusing on several US economic indicators this week, including the services sector index, minutes from the Federal Open Market Committee meeting, and consumer confidence data. These indicators could provide further insight into the labor market's slowdown and its implications for US monetary policy. Geopolitical developments in the Middle East and energy prices are also being closely monitored, as they could impact inflation and central bank policies.

Technically, $4,200 per ounce is identified as a key resistance level, while support is seen around $4,100 and $4,000. Movements in the US dollar and Treasury yields, along with energy prices and geopolitical developments, will continue to shape gold's direction. Locally, 24-karat gold prices reached approximately KD 41.460 per gram ($134), while 22-karat gold stood at around KD 38 per gram ($123). The price of a kilogram of silver reached about KD 657 ($2,133).