Gold fell to its lowest in nine months on Friday after better-than-expected U.S. employment data bolstered the dollar and U.S. Treasury yields, putting bullion on course for its third straight weekly decline.
Spot gold was down 0.1% at $1,695.22 by 11:50 a.m. ET (1650 GMT), after falling to its lowest since June 8 at $1,686.40 in the session. It has fallen nearly 2% this week.
U.S. gold futures slipped 0.4% to $1,693.10.
"This optimism in regards to the economy moving forward continues to drive bond yields higher and that certainly has been taking the wind out of the sails of many commodity markets, including gold," said David Meger, director of metals trading at High Ridge Futures.
Data showed U.S. jobs increased more than expected in February, raising hopes around a quick economic rebound driven by massive fiscal stimulus and vaccination drives.
The strong economic data lifted benchmark 10-year Treasury yields to their highest since February 2020, while the dollar also jumped.
U.S. Federal Reserve Chair Jerome Powell on Thursday repeated his pledge to keep credit loose and flowing until Americans are back at work.
However, his comments disappointed gold investors who expected him to act on the recent surge in the U.S. 10-year Treasury yield, which has sent bullion below $1,700 per ounce.
"The gold market is giving back the pandemic gains. The drop below $1,700/oz leaves the market looking fragile," HSBC analysts said in a note.
"Powell's comments – while not new – have extinguished for the moment any possibility that the Fed will act on rising yields further out the curve. Further yield gains could throw gold and the other precious metals lower."
Silver dropped 1.6% to $24.90 an ounce and was down nearly 6% on the week, its biggest weekly percentage fall since late November.
Palladium was up 0.2% at $2,344.64, while platinum fell 1% to $1,114.72.
(Reporting by Brijesh Patel in Bengaluru; Editing by Steve Orlofsky and Andrea Ricci) ((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848 5832, Outside U.S. +91 8067493865; Reuters Messaging: Brijesh.Patel1.firstname.lastname@example.org))