Gold held near nine-month lows as the dollar rallied further on yields

Gold

On Friday, gold hit a nine-month low after better-than-expected U.S. jobs data lifted the dollar and U.S. Treasury yields, placing bullion on track for a third straight weekly loss.

Spot gold was down 0.1% at $1,695.22 after hitting a low of $1,686.40 earlier in the day. This week, it has dropped nearly 2%. U.S. gold futures fell 0.4% to $1,693.10.

“Optimism about the future of the economy continues to drive bond yields higher, and that is taking hope out of many commodity markets, including gold,” said David Meger, director of metals trading at High Ridge Futures.

U.S. jobs added more jobs than expected in February, data showed, boosting expectations for a quick economic recovery fueled by substantial fiscal stimulus and vaccination drives. The strong economic data pushed the yield on the benchmark 10-year Treasury yields to its highest level since February 2020, while the dollar also rallied sharply.

U.S. Federal Reserve Chair Jerome Powell repeated his pledge to keep credit loose and flowing until Americans back at work.

Silver dropped 0.5% to $25.16 an ounce and was down 5.5% on the week, its biggest weekly percentage fall since late November.

Palladium was up 0.8% at $2,357.28, while platinum eased 0.2% to $1,123.66.

Damon Harrison
Market Analyst, IPG Group