Gold futures log steepest daily and weekly decline in nearly two months as bond yields, dollar rise

The employment report for July showed that the U.S. economy added 943,000 jobs, according to the Labor Department. Economists had forecast 845,000 jobs last month. Meanwhile, the unemployment rate dropped to 5.4%, below the estimate of 5.7% and falling below the 5.9% rate for June.

The drop in prices for gold may be linked to the belief that the jobs report may give the Federal Reserve more ammunition to raise interest rates and taper its $120 billion in monthly asset purchases sooner than later.

All week, silver and gold have been pressured by an uptick in the U.S. dollar, which has risen 0.5% so far, as measured by the ICE U.S. Dollar Index DXY, +0.60%, a weighted gauge of the buck against a half-dozen currencies. The 10-year Treasury note yield TMUBMUSD10Y, 1.294%, meanwhile, was up around 1.28% from 1.21% on Thursday.

A strong dollar and buoyant yields can diminish appetite for assets priced in the currency.

“The strength of the US dollar is keeping the pressure on safe havens like gold with the precious metal continuing to drop on Friday,” wrote Pierre Veyret, technical analyst at ActivTrades in a daily research report.

Gold also has been under pressure as equity markets have been trading near record highs, despite concerns about the spread of the highly transmissible delta variant of COVID-19 in many countries.

Meanwhile, silver for September delivery SIU21, -3.74% SI00, -3.74%  lost 96.6 cents, or 3.8%, to settle at $24.326 an ounce, marking its sharpest one-day drop since June 17, following a 0.7% decline on Thursday. Silver logged a weekly decline of about 4.8% based on the most-active contract, also marking its steepest yield drop since June 18.

In other metals, September copper HGU21, -0.20% HG00, -0.20% finished virtually unchanged for the session, settling at $4.348 a pound. For the week, the industrial metal finished 2.9% lower. The commodity also registered its worst weekly slide since mid June.

October platinum PLV21, -2.92%  shed $33.50, or, to settle at $972.20 an ounce, marking the precious metals first finish below $1,000 since around November, based on the most-active contract. The contract finished down 7.3% for the week, marking its sharpest such decline since the middle of June.

September palladium lost $25, or 0.9%, to close at $2,630.10 an ounce, with a weekly fall of 1%.