Gold Drops 1% as Dollar and Bond Yields Rise

Gold prices fell 1 percent on Friday, as stronger-than-expected U.S. jobs data reinforced expectations that the Federal Reserve (the U.S. central bank) would keep interest rates at higher levels for longer, driving up the dollar and Treasury yields.

Spot gold fell 0.3 percent to $4,047.36 per ounce, having earlier recorded its session low at $4,033.29 per ounce.

Spot gold rose 5.2 percent over the week, on track for its best weekly performance since late August.

Independent metals trader Tai Wong said, “Gold dropped sharply following a strong jobs report across the board, but it is trying to recover and rise again, which is a crucial test for further price gains this week.”

U.S. non-farm payrolls rose more than expected in October, while the unemployment rate fell to 4.1 percent, indicating that the labor market remains strong and gives the Federal Reserve greater scope to focus on inflation driven by the conflict in the Middle East.

Gold and silver posted strong gains on November 4, after global markets repriced their expectations following the Democratic Party’s majority win in both chambers of the U.S. Congress, a development investors viewed as a sign that upward pressure on the dollar could ease and the likelihood of lower U.S. bond yields in the future could rise.

This rally came just days after a sharp sell-off hit the metals, as markets underwent significant shifts following the results of the U.S. midterm elections.

Investors appear to be betting that the political division in Washington after Democrats took control of Congress will curb some fiscal and trade policies that supported the dollar in recent months.

The decline in the U.S. currency and lower Treasury yields also boosted the appeal of precious metals, which typically move in the opposite direction of the dollar and yields.

Notably, this surge comes despite the relatively weak performance of precious metals year-to-date. Gold remains down about 6 percent from its early 2026 levels, while silver has lost roughly 26 percent of its value, reflecting the pressure from high interest rates and a strong dollar for much of the year.

Over recent months, gold’s appeal as a non-yielding asset has waned, as the Federal Reserve continued to maintain a tight monetary policy to combat inflation.

High interest rates have prompted investors to allocate part of their funds to bonds and the dollar instead of precious metals, contributing to the selling wave that hit gold and silver after their record gains in the previous year.

Despite the optimism surrounding Wednesday’s session, many analysts believe it is still too early to declare the start of a new upward cycle.

The most influential factor in gold prices remains the Federal Reserve’s trajectory, not election results alone. If the U.S. central bank continues to signal that it will keep interest rates at higher levels for longer, precious metals could face new pressures that limit their recent gains.