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Gold futures traded slightly lower Monday, remaining under pressure after losing ground at the end of last week following a weaker-than-expected September jobs report.
Gold for December delivery
GC00,
GCZ21,
was down $2.90, or 0.2%, at $1,754.50 an ounce on Comex, after edging down 0.1% in a choppy Friday session after data showed the U.S. economy added just 194,000 jobs last month. Economists had looked for a rise of 500,000.
December silver
SIZ21,
was down 14.5 cents, or 0.6%, at $22.56 an ounce.
Gold initially rallied Friday as Treasury yields fell in the wake of the jobs report. A subsequent turnaround by yields, however, with the rate on the 10-year Treasury note
TMUBMUSD10Y,
reversing back above 1.6% took the wind out of the metal’s sails, analysts said. Higher Treasury yields raise the opportunity cost of holding a nonyielding asset like gold.
The Treasury market is closed Monday for a federal holiday, though most other financial markets remain open.
Yields rose because the Federal Reserve is still seen as likely to announce next month that it’s ready to begin scaling back its monthly bond purchases, said Carsten Fritsch, analyst at Commerzbank, in a note.
While the payrolls number was disappointing, rising wages and a fall in the unemployment rate point to a tight labor market, which could stoke inflationary pressures, he said in a note.
“This should also argue in favor of an imminent tightening U.S. monetary policy and will probably prevent the gold price from rising towards the $1,800 mark,” Fritsch wrote. “In fact, gold faces more in the way of downside risks in the short term if it falls below the $1,750 mark.”
