Gold slips to first weekly loss in a month as traders trim bets on early Fed easing

Gold futures posted their first weekly decline in four weeks, as the U.S. dollar and 10-year Treasury yields hit their highest levels in three weeks.

Gold initially fell Friday after U.S. data showed a larger than expected addition of 216K new jobs in December, then rebounded on the weak survey from the Institute for Supply Management, which revealed a drop in business confidence at service oriented companies; gold moved ~$40/oz in 90 minutes, as analysts said futures traders rushed to reprice the odds of a March rate cut.

“Friday’s big swings in gold show how, for now at least, Fed policy trumps geopolitics in the futures market,” Adrian Ash, director of research at BullionVault, told MarketWatch.

Gold finished flat in Friday’s trading; for the week, front-month Comex gold (XAUUSD:CUR) for January delivery closed -0.9% to $2,042.40/oz, while front-month January silver (XAGUSD:CUR) settled -3% to $23.122/oz.

Palladium futures (XPDUSD:CUR) fell for the ninth consecutive session to a three-week low $1,027.11/oz, -6.4% for the week.

ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (PALL)

“With the Federal Reserve pivoting towards rate cuts, we see the guessing game with regards to the number of rate cuts being a major driver of volatility in the months ahead,” Saxo Bank commodity strategy chief Ole Hansen said.

Gold prices posted a strong end to 2023, rising 11% in Q4 as the Israel-Hamas war intensified and threatened commercial shipping in the Red Sea.