Gold prices retreated in the European market on Friday to deepen their losses for the third day in a row, hitting the lowest level in nine months, after abandoning trading above the psychological barrier at $ 1,700 an ounce, on the verge of incurring the third consecutive weekly loss, due to the high yield of US Treasury bonds, ahead of Important data on the US labor market will be released during February.
Gold prices fell by 0.6% to $ 1,687.37, the lowest since June 2020, from today’s opening level of $ 1,697.42, and reached the highest level at $ 1,700.41.
The precious metal “gold” ended yesterday’s trading, down by 0.8%, in the second consecutive daily loss, giving up levels of $ 1,700 an ounce for the first time in nine months, due to the high yield of US Treasury bonds.
In terms of trading this week, gold prices are down by 2.7%, on the verge of incurring a third consecutive weekly loss, as investors focus on buying the US dollar.
The dollar index rose on Friday by 0.4%, extending its gains for the third day in a row, recording its highest level in four months at 92.01 points, reflecting the acceleration of the rise in the levels of the American currency against a basket of major and minor currencies, which negatively puts pressure on the prices of metals denominated in the US dollar.
As the investor’s appetite for buying the dollar as the best alternative investment increased, and the reluctance to buy high-yielding, risky or non-returnable assets, after the new jump in US Treasury bonds yields.
On Friday, the 10-year US Treasury yield increased by 1.1%, to continue its rise for the third day in a row, reaching a 13-month high of 1.583%, amid expectations of further rises above the 1.6% barrier.
This new jump in bond yields comes despite the dovish speech of the Federal Reserve Chairman on Thursday at an online event organized by The Wall Street Journal.
Powell said the massive sell-off in Treasury notes was noticeable and attracted attention, but it was neither disorganized nor likely to push long-term interest rates to a very high level that needed to intervene more aggressively.
Powell confirmed that he expects some inflationary pressures to appear in the United States during the coming period, but they will not be sufficient to take a decision to raise the interest rate, as the central bank adheres to super-easy monetary policy until the economy recovers strongly.
Later today, investors await the release of important data from the US labor market, especially the new jobs data in the non-agricultural sectors during February. These data provide strong evidence about the pace of the performance of the largest economy in the world during the first quarter / 2021.
By 13:30 GMT, jobs data in the non-agricultural sector will be released. Expectations indicate that the US economy will add 197,000 new jobs during February, compared to adding 49,000 jobs in January, with the unemployment rate stabilizing at 6.3%, and an average is also issued. Hourly per capita income is expected to rise 0.2% with the same previous reading.
The gold holdings of the SPDR Gold Trust, the largest global index fund backed by gold, fell yesterday by 4.08 metric tons, in the second consecutive daily decline, bringing the total to 1,078.30 metric tons, which is the lowest level since May 6, 2020.