Gold eases on firmer U.S. yields, but set for best week in 7
3842 Mins Read
Gold prices retreated on Friday as firmer U.S. bond yields and a strong dollar weighed on the metal, but bullion was on course for its biggest weekly gain in seven.
Spot gold eased 0.2% to $1,718.10 per ounce by 0344 GMT. The metal’s prices had slumped to a nine-month low on Monday, but a pullback in Treasury yields helped spark a rebound that has put gold on track for a weekly gain of 1%. U.S. gold futures fell 0.4% to $1,715.10.
“It’s basically a function of elevated yields and although yields aren’t marching higher, the problem is they’re not going lower, and that presents a problem,” said Stephen Innes, chief global market strategist at financial services firm Axi. “Gold’s going to hold around $1,700 … unless we break new ground on higher yields.”
Benchmark U.S. Treasury yields climbed, increasing the opportunity cost of holding gold, while the dollar bounced back from a near one-week low. Investors are now awaiting the U.S. Federal Reserve meeting next week for direction on its monetary policy.
President Joe Biden on Thursday signed his $1.9 trillion stimulus bill into law and said he was working to speed COVID-19 vaccinations and move the country closer to normality by July 4. “The implementation of Biden’s pandemic relief bills is stoking fears of a massive supply of bonds hitting the market, as well as rising inflation,” ANZ analysts said in a note. “The continued rollout of vaccines is also supporting the labour market, thus diminishing support for safe-haven assets.”
Silver eased 0.5% to $25.94 an ounce, but was on track for its best week since late January with a 3% rise.
Palladium fell 0.2% to $2,339.54. Platinum rose 0.6% to $1,202.21 and was set to post its best week in four with a 6.5% gain.
