Gold falls as robust US NFP boosts Dollar, but remains on track for weekly gains

Gold (XAU/USD) trades on the back foot on Friday as stronger-than-expected US Nonfarm Payrolls (NFP) data lifts the US Dollar (USD). At the time of writing, XAU/USD trades around $4,050, down 1.20% on the day, after climbing to a two-week high of $4,146 on Thursday.

Gold extends its decline as stronger-than-expected US jobs data lift the Dollar and Treasury yields.

Lower Oil prices support Gold's weekly recovery, although hawkish Fed expectations remain a hurdle.

XAU/USD holds above the 50-period and 100-period SMAs on the 4-hour chart.

Higher interest rates increase the appeal of interest-bearing assets, weighing on Gold, which offers no yield.

The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades around 102.22, up 0.62% on the day.

US Treasury yields also rebound, with the benchmark 10-year yield rising 4 basis points (bps) to 4.88%.

Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets.

A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

From FXStreet