Gold prices were at risk following successive sessions of gains after hitting a multi-month low.
The metal remained in an overall downtrend since the beginning of the year as the US dollar and Treasury yields strengthened over the same period.
Looking forward, gold could find some relief if inflation concerns recede and monetary policy expectations soften. In the United States, Treasury yields remained under some pressure following Thursday’s weaker-than-expected non-farm payrolls report, which led market participants to scale back interest rate hike expectations to just one increase this year.
This week’s FOMC minutes could prove pivotal in shaping the near-term path for yields, and by extension, for gold.
While softer bond yields could provide some support to the metal, a strong US dollar could limit the rebound potential for gold. The US currency edged higher today, weighing on the metal in the process.
Gold could also react to any new comments from Federal Reserve officials in the coming days. The latter could affect inflation and monetary policy expectations. At the same time, ongoing central bank purchases could help limit the downside risks for gold and could support a rebound if bond yields retreat.