Gold Pulls Back as Rising Yields Temper Post-Jobs Rally

Gold prices slipped on Monday as investors locked in profits from last week’s rally and U.S. Treasury yields inched higher, reducing the appeal of the non-yielding metal. Spot gold fell about 0.2% to roughly $3,356.91 an ounce by 10:51 a.m. GMT, while U.S. gold futures added 0.3% to $3,410.20. The modest pullback followed Friday’s more than 2% jump that had carried bullion to its strongest level in five weeks. The earlier surge was fueled by weaker-than-expected U.S. labour data, which showed nonfarm payrolls rising just 73,000 in July and the prior month’s gain revised down sharply to 14,000. The soft figures reinforced expectations that the Federal Reserve will cut interest rates in September; CME’s FedWatch tool puts the probability near 80%. Even with Monday’s consolidation, analysts said stagflation risks and the prospect of lower borrowing costs should keep downside limited. Citi raised its three-month gold price forecast to $3,500 an ounce, citing a deteriorating outlook for U.S. growth and inflation.