Gold prices are under pressure as rising U.S. Treasury yields and a stronger dollar weigh on the precious metal. The recent U.S. Nonfarm Payrolls report, which exceeded expectations with 256,000 jobs added in December, has reinforced the view that the Federal Reserve may maintain higher interest rates for longer. This has led to a spike in U.S. yields, with the 10-year Treasury yield reaching 4.79%, its highest level in 14 months. The stronger dollar, bolstered by robust economic data, further adds to the headwinds for gold, which typically moves inversely to the greenback and yields.
Additionally, profit-taking is contributing to the downward pressure on gold prices. After a strong start to the year, gold is experiencing a pullback as traders lock in gains. The market is also digesting the implications of the upcoming U.S. inflation data, which could influence future monetary policy decisions. Despite these challenges, gold's long-term outlook remains supported by geopolitical uncertainties and inflation concerns, which continue to drive haven demand.
The SPDR Gold ETF (GLD) is trading at $246.57, down 0.66% as of 10:00 AM ET on January 13th.