Gold prices slipped on Monday after a slight uptick in US bond yields and ahead of a speech by Federal Reserve Chair Jerome Powell later this week for more clarity on the interest rate outlook.
Spot gold was down 0.5% at $1,981.90 per ounce by 0718 GMT after rising above the key $2,000 level on Friday.
US gold futures fell 0.5% to $1,989.80. “The major factor that will influence gold in the near-term will be the US 10-year Treasury yields… if you start to see resurgence in yields, gold could break below the key support level around $1,974,” said Kelvin Wong, senior market analyst for Asia Pacific at OANDA.
Benchmark 10-year Treasury yields rose to 4.5910% after hitting a five-week low on Friday, lowering appeal for non-yielding bullion.
Data on Friday showed US job growth slowed in October, and the increase in annual wages was the smallest in nearly 2-1/2 years, pointing to easing labor market conditions.
The soft jobs report raised expectations that the Fed may be done with its rate hiking campaign, sending the dollar to a six-week low.
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Traders are now pricing in a 95% chance that the US central bank will leave rates unchanged in December and an 86% chance that the first policy easing will come as soon as June.
Investors will be looking out for cues on the Fed’s interest rate path, with at least nine Fed members speaking this week, including Powell’s on Nov. 9.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.20% to 863.24 tonnes on Friday.
“ETF holdings have increased by 1 million oz in the last two weeks, as speculators have covered short positions.
Even so, gold’s performance hinges on an end of Fed’s hiking cycle,“ ANZ analysts said on Friday.
Spot silver eased 0.4% to $23.11 per ounce, platinum fell 0.3% to $927.51 and palladium gained 0.4% to $1,123.83.
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