Gold posts weekly loss of more than 3% as strong dollar and higher US Treasury yields weigh

Gold prices fell on Friday, giving up earlier gains as a strong US dollar and higher Treasury yields weighed on the non-yielding metal, putting it on track for a weekly loss.

Spot gold fell 0.8% to $4,145.68 an ounce. US gold futures also settled 0.9% lower at $4,162.30 an ounce, with the precious metal posting a weekly loss of 3.67%.

The US dollar edged lower but remained on track for a weekly gain, while 10-year and 30-year US Treasury yields on Thursday reached their highest levels since 2002.

Gold prices reversed course after rising more than 1% earlier in the session following data showing that US job growth slowed more than expected in September.

The closely watched US Labor Department employment report released on Friday showed nonfarm payrolls increased by 29,000 last month, following a downwardly revised gain of 133,000 in August. Economists surveyed by Reuters had expected payrolls to rise by 90,000, compared with the previously reported increase of 162,000 in August.

Interest rate expectations weigh on gold

Gold has fallen more than 20% since the US-Israeli war with Iran erupted in late February, pressured by expectations that conflict-driven inflation could keep interest rates higher for longer.

The latest weaker-than-expected inflation data, along with opposition from at least two senior policymakers to another interest rate hike in October, strengthened investor expectations that the Federal Reserve will leave interest rates unchanged later this month.

Traders now see around a 22% probability of a US interest rate hike this month, down from roughly 70% earlier in the week, according to the CME FedWatch Tool.

Spot silver fell 1.1% to $60.17 an ounce, platinum declined 1.9% to $1,692, while palladium slipped 0.4% to $1,166.25.