Gold fails at $4,200 despite NFP miss as US yields climb

Gold prices fell on Friday, failing to break the $4,200 mark despite a less-than-impressive US employment report. The precious metal slipped nearly 1% after the XAU/USD traded at $4,138, falling from a peak of $4,227 earlier in the session. US Nonfarm Payrolls in September were well below estimates, posting just 29K jobs, down from the revised 133K in August.

This caused the Unemployment Rate to rise from 4.1% to 4.2%, exceeding the Federal Reserve's projections for 2026 and 2027. The news sent US yields higher and raised the possibility of an October rate skip, with 88% odds of a December rate hike. Gold struggled to rally as the US Dollar lost its safe-haven appeal, with the DXY down 0.14% at 101.89.

US Treasury yields climbed to 5.9%, up 4 basis points, making gold less attractive due to its non-yielding nature. Meanwhile, light news from the Middle East kept energy prices depressed, causing West Texas Intermediate (WTI) crude to drop 1.6% to $91.42. The Relative Strength Index (RSI) indicated that sellers were in control, with the index below its 50-neutral level.

The first support for gold is the $4,100 milestone, with a potential move toward the July 29 low of $3,996 if sellers clear this level. Buyers need to reclaim $4,200 to challenge the 100-day Simple Moving Average (SMA) at $4,279. Gold has historically been a store of value and a hedge against inflation and currency depreciation.

Central banks are the biggest holders of gold, adding 1,136 tonnes worth around $70 billion to their reserves in 2022.