Gold edges lower as US dollar, yields rise

Gold prices edged down on Friday, pressured by a stronger US dollar and Treasury yields, but a weak job growth data from the world's biggest economy prompted analysts to increase bets for a rate cut from the Federal Reserve, limiting some losses.

Spot gold fell 0.2% to $2,736.28 per ounce by 1:55 p.m. ET (1755 GMT). Prices fell 1.5% on Thursday as some traders took profit after bullion hit a record high of $2,790.15.

US gold futures settled largely steady at 2,749.2.

Nonfarm payrolls increased by 12,000 jobs last month, the smallest gain since December 2020, affected by disruptions from hurricanes and strikes by aerospace factory workers.

The dollar erased earlier losses and gained 0.4%, while benchmark 10-year US Treasury yields also rebounded from an earlier drop, making non-yielding gold less appealing.

There's too much risk on the table ahead of the US election and also with talks of an Iranian retaliatory strike on Israel, and the terrible jobs report should bring a rate cut here by the Fed, said Bob Haberkorn, senior market strategist at RJO Futures.

Economists see a 100% chance of a 25-basis-point cut by the Fed next week, versus a 91% chance before the jobs data.

Opinion polls indicate a close race between Donald Trump and Kamala Harris in Tuesday's US presidential election.

Gold, a traditional hedge against economic and political uncertainty, tends to thrive in a low interest rate environment.

Gold prices are typically influenced by the dollar and real yields. However, current high market interest in gold is partly driven by the upcoming elections, anticipated Fed rate cuts, and broader economic and geopolitical uncertainties, Standard Chartered said in a note.

High gold prices, however, continue to affect physical demand in major Asian regions.

Among other metals, spot silver lost 0.7% to $32.42 per ounce. Platinum gained 0.3% to $990.45, while palladium shed 0.4% to $1,101.25.