Gold faces a weekly loss due to rising bond yields in early trade

4 Aug 2023 , 10:05 AM

On Friday, investors were preparing for the closely anticipated U.S. jobs report after a run of positive economic reports this week sent Treasury yields to nine-month highs, and gold prices appeared to be headed for their worst week in six.

Spot gold was up 0.1% at $1,936.15 per ounce, while U.S. gold futures were up 0.2% at $1,971.70.

Since their lowest point on July 11 in the previous session, gold prices have dropped more than 1% this week.

On Thursday, U.S. long-term Treasury yields reached their highest level since November as a result of reducing inflationary pressures in the employment and other economic indicators.

As bond yields increase, gold’s allure decreases since it offers no interest.

According to data released on Thursday, while layoffs decreased to an 11-month low in July due to the continued tight job market, the number of Americans submitting new claims for unemployment benefits increased marginally last week.

On Thursday, the Bank of England hiked its benchmark interest rate for the 14th consecutive time, reaching a 15-year high, and issued a warning that borrowing rates would likely remain high for some time.

According to a survey, the manufacturing fall in July was accompanied by a further slowing of development in the euro zone’s dominating services sector. As a result, the decline in economic activity was greater than first anticipated.

Fabio Panetta, a member of the ECB board, spoke on Thursday in favour of maintaining the bank’s high interest rates for an extended period of time.

On Thursday, the governor of China’s central bank vowed to direct more financial resources toward the private sector.

Platinum increased by 0.3% to $917.29 and spot silver increased by 0.2% to $23.6 per ounce. Both were slated to post losses for the third straight week. At $1,260.65, palladium was up 0.2%.

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