The gold metal suffered strong losses at the close of trade in the week ended January 19, closing 0.95% at $2029.48 per ounce, weighed down by the US dollar and US Treasury yields.
In this regard, the US dollar rose by 0.78% to 103.239 points, which reinforced the decline in demand for gold as one of the greenback-denominated commodities, due to increasing market expectations regarding the Federal Reserve holding interest rates. At high levels for a long period of time, and its implications have a negative impact on gold's performance.
These expectations were fueled by positive data on US retail sales last December, which rose 0.6% compared to 0.3% in November. And they were higher than market expectations of 0.4%, reflecting the strength of demand in the US and evident. Effects of inflation in the country.
The positive jobless benefits data reinforced the same belief that the U.S. Federal Reserve will keep interest rates high for longer, as jobless claims rose by 187,000, beating market expectations for a 206-point increase. The thousands of applications indicate the strength of conditions in the US labor market. This has effects on consumer spending and, as a result, high inflation, which has led to the rise of the dollar and subsequent decline in the price of gold.
In addition to the dollar's clear rise over the past week, a rebound in US Treasuries of various maturities contributed to strengthening the downward momentum in gold prices over the weekend. Buying bonds seemed like a better investment opportunity for traders than holding gold. The benchmark 10-year US Treasury yield posted weekly gains of 4.69% to 4.126%, while the 30-year US Treasury yield posted weekly gains of 3.69% to 4.333%.