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10 December 2023

Gold set to break longest losing streak in 7 years as bond selloff cools

By Reuters

Gold edged higher on Thursday, set to end its eight-session-long losing streak, last seen around the same time in 2016, as U.S. bond yields and the dollar retreated from recent highs ahead of a keenly awaited non-farm payrolls report this week.
Spot gold rose 0.3% to $1,826.49 per ounce by 0314 GMT, attempting a rebound from its weakest levels since March touched on Tuesday. U.S. gold futures gained 0.3% to $1,840.90.

“While there is an attempt for gold prices to stabilize into today’s session, there is not much conviction of a reversal just yet,” IG market strategist Yeap Jun Rong said.

Any moves before the U.S. non-farm payroll this week may be short-lived, with the official job data still the key catalyst in dictating market direction ahead, along with the U.S. CPI data next week, he added.

Data on Thursday showed U.S. private payrolls increased far less than expected in September. Markets now await the Labor Department’s more comprehensive employment report on Friday.

A broad selloff in world government bonds on Wednesday drove up U.S. 30-year Treasury yields to 5% for the first time since 2007 and German 10-year yields to 3%, which could hasten a global slowdown and hurt stocks and corporate bonds.

Benchmark U.S. 10-year bond yields fell from 16-year highs on Thursday and the U.S. dollar was 0.2% lower, allaying some pressure on non-yielding gold. [US/][USD/]

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.5% to 869.31 metric tons on Wednesday, its lowest since August 2019. [GOL/ETF]

The subdued dollar also buoyed other greenback-priced precious metals, with spot silver up 1.1% to $21.19 per ounce, having slipped to its lowest since mid-March this week.

Platinum gained 0.5% to $870.16, rising from its lowest in a year hit in the last session, and palladium firmed 1.2% to $1,181.15, off a 5-year low touched on Wednesday.