U.S. Treasury yields rose slightly on Thursday as markets digested a weaker-than-expected ADP payrolls report and braced for the NFP data. The yield on ten-year government bonds rose by more than 2 basis points to 4.205%, while the yield on two-year government bonds rose by 3 basis points to 4.152%. Higher yields tend to weigh on gold prices by increasing the opportunity cost of holding the unyielding metal.
Market analysts see a rangebound move
Ole Hansen, head of commodity strategy at Saxo Bank, noted that gold is in a “relatively tight range,” indicating a lack of strong guiding factors. Meanwhile, Zain Vawda of MarketPulse by OANDA predicted a possible short-term rise towards $2,700 per ounce, citing seasonal weakness in the US dollar. However, Vawda warned of possibilities for deeper corrections in the medium term.
Gold price prediction
In the short term, gold prices could find support if Friday’s NFP report falls short of expectations, potentially pushing prices higher toward the $2,700 level. However, strong wage figures or rising government bond yields could exert downward pressure. With the Fed showing caution on rate cuts, gold is likely to remain within a range in the near term. A break above the 50-day moving average at $2668.65 would be needed to confirm a bullish breakout.
More information in our Economic Calendar.