Gold prices fell below $4,150 as strong US jobs data and rising Fed rate-hike expectations increased the opportunity cost of holding the non-yielding metal.
Gold fell to near $4,125 as December Fed rate-hike odds jumped to 84.0% from 72.8% after strong US jobs data (165,000 October NFP vs 60,000 in September, unemployment down to 4.1%), raising the opportunity cost of holding non-yielding gold. A potential US-Iran peace deal easing safe-haven demand adds pressure, though risk-off equities and falling oil limiting inflation may offset some losses.
The stronger-than-expected October jobs report (165,000 vs 60,000 in September) and falling unemployment at 4.1% lifted the probability of a December Fed rate hike to 84.0% from 72.8%, supporting the dollar as markets price higher rates for longer.
Deutsche Bank notes the 10-year US Treasury yield is up 1bp at 4.87% even as the risk-off tone in equities brought sovereign yields worldwide lower. Rising Fed hike expectations argue for higher yields, while the defensive bid and AI selloff cap them, leaving the net direction mixed.
Gold prices retreated to near $4,125 as robust US labor data fueled expectations for a December Federal Reserve rate hike. The probability of a rate increase rose to 84.0% from 72.8% following an October NFP report that showed 165,000 new jobs and a decline in the unemployment rate to 4.1%.
Strong US jobs data pushed expectations of a December Fed rate hike to around 84%, and higher interest rates make non-yielding gold less attractive, pulling the price below $4,150 to near $4,125.
Resistance sits around $4,200 at the 100-day SMA and $4,225 at the upper Bollinger band; support is near $4,065 at the Bollinger middle band and around $3,900 at the lower band.
The strong October jobs report raised bets on a December Fed rate hike to about 84%, which supports the dollar as higher rates make dollar assets more attractive.
It was up 1 basis point at 4.87%, moving against the global trend of falling sovereign yields despite the risk-off tone in equities.