Gold prices today, October 3rd: Falling as USD strengthens and US bond yields rise.

According to Kitco , the spot gold price at 17:45 ET (21:45 GMT - 04:45 AM on October 3rd in Vietnam time) fell 0.88% to $4,139.8 per ounce.

Since the beginning of the week, the spot gold price has fallen by approximately 3.4%.

US gold futures contracts fell 1% to $4,162.30.

The USD edged lower during the session but remains on track for a weekly gain. Meanwhile, yields on 10-year and 30-year US Treasury bonds rose to their highest levels since 2002 on Thursday, adding pressure on gold – an asset that does not generate interest income.

Gold initially rose more than 1% after the US September jobs report showed a weaker-than-expected labor market. According to the US Department of Labor, non-farm jobs increased by only 29,000 last month, following a downward revision of the August figure to 133,000. Economists surveyed by Reuters had previously forecast a 90,000 job increase in September, while the initial August increase was reported at 162,000.

Weak employment data typically supports expectations that the Fed will cut or maintain interest rates at lower levels, which is beneficial for gold. However, this impact was not enough to sustain the precious metal's gains during the session, as US bond yields remained high and the USD was on an upward trend this week.

Reuters quoted Han Tan, head of market analysis at Bybit, as saying that investors still need to be cautious about the outlook for gold because the Fed has not completely abandoned its tightening stance. He believes that the movement of gold in the coming months will depend heavily on how the Fed balances the risk of a weakening labor market and its goal of controlling inflation.

Gold has fallen more than 20% since the conflict between the US and Israel and Iran began in late February. The market is under pressure as the conflict increases concerns about inflation, thereby reinforcing the likelihood of US interest rates remaining high for a longer period.

Meanwhile, the latest US inflation figures were lower than expected, and the fact that at least two senior Fed officials opposed another interest rate hike in October significantly dampened expectations that the Fed would continue to raise interest rates this month.

According to CME's FedWatch tool, the market is now pricing in the probability of a Fed interest rate hike in October at around 22%, a sharp drop from around 70% earlier this week.

Edward Meir, an analyst at Marex, believes that the interest rate outlook remains a factor putting pressure on gold. He suggests that if a cycle of interest rate hikes resumes, gold prices could continue to face pressure.