New York —Gold was on track for its biggest weekly gain since August, according to Bloomberg, trading at $4,053.10 an ounce as of 04:40 GMT on Friday, about 4.0 percent above last Friday’s close of $3,898.90. Treasury yields fell after Democrats made gains in this week’s midterm elections, lending support to the metal ahead of the October jobs report later on Friday.
Most of the advance came in two sessions. Gold rose 3.4 percent on Wednesday, as the election results came in, to close at $4,073.00, and added another 1.0 percent on Thursday to close at $4,113.50. At that point it was up 5.5 percent on the week.
Part of that gain was reversed in Asian trading on Friday. Gold was down $60.40, or 1.5 percent, from Thursday’s close, and silver fell 1.7 percent to $51.47. Oil moved the other way. Brent crude rose 1.7 percent to $99.98 a barrel and West Texas Intermediate gained 1.3 percent to $91.74. Both benchmarks had dropped sharply earlier in the week: Brent fell 8.7 percent on Wednesday to $94.62 and WTI fell 8.3 percent to $88.12. Even after the rebound, Brent remained about 15 percent below last Friday’s close of $117.64.
Bonds rallied as stocks sold off
The move in gold followed the bond market. The 10-year Treasury yield ended Thursday at 4.837 percent, down 5.7 basis points on the day and about 9 basis points below its level a week earlier. It has fallen by almost half a percentage point since early October, when it stood above 5.3 percent. The 5-year yield fell 8.1 basis points on Thursday to 4.608 percent, and the 30-year yield fell 3.1 basis points to 5.251 percent. Lower yields reduce the cost of holding gold, which pays no interest.
Demand for bonds rose as stocks slumped. The S&P 500 fell 4.36 percent on Thursday to close at 7,353.73, the Nasdaq Composite fell 5.52 percent to 24,315.00, and the Cboe Volatility Index rose to 28.18 from 16.61. The Financial Times, which described the result as a Democratic sweep, reported that the narrower Nasdaq 100 index lost 6.4 percent as AI-related shares sold off, and that about $3.2 trillion was erased from the value of US stocks.
The dollar did little to help or hurt gold over the week. The US Dollar Index was 0.2 percent higher at 101.765 in Asian trading on Friday, little changed from last Friday’s close of 101.88.
Gold has recovered from its late-October low after the midterms
Daily close, US dollars per ounce; Nov 6 is the latest quote, as of 04:40 GMT
Source: Economy & Markets market data
Even after this week’s gain, gold is well below its highs from earlier in the year. In late February the metal traded above $5,200 an ounce, and Friday’s price is about 22 percent below that level.
Jobs report is next
The Bureau of Labor Statistics is scheduled to release its October employment report at 8:30 a.m. Eastern time on Friday. The unemployment rate was 4.2 percent in September, according to Labor Department data published by the St. Louis Fed. The effective federal funds rate has been 3.88 percent since the start of October.
The report will test whether the drop in yields lasts. A weak payrolls reading would add to the case for lower rates, which tends to support gold. A strong one, with Brent crude back near $100 a barrel, could push yields higher and cut further into the week’s gain before markets close.
