Gold prices fall, but head for modest weekly gain, even as U.S. dollar firms

Gold prices fall, but head for modest weekly gain, even as U.S. dollar firms

Gold futures slid Friday morning as the U.S. dollar firmed and investors were parsing President-elect Joe Biden’s $1.9 trillion COVID-19 relief plan announced late Thursday.

Bullion has been particularly sensitive to moves in the U.S. dollar and a rise in government debt yields, which can undercut appetite for precious metals.

On Thursday, February gold prices


gave up $11.40, or 0.6%, at $1,839.90, after a 0.2% decline on Thursday.

Silver for March delivery

meanwhile, shed 92 cents, or 3.7%, to trade at $24.87 an ounce, after gold’s sister metal added 0.9%, a day ago.

For the week, gold is still holding on to a 0.3% rise, while silver was headed for a 0.9% weekly advance.

At last check, the dollar was trading up 0.2% at 90.44, as gauged by the ICE U.S. Dollar IndexDXY, a measure of the buck against a half-dozen major-developed currencies.

The dollar for the week, meanwhile, was looking at a 0.4% gain, while the 10-year Treasury note yield

has held mostly steady at around 1.10% since last Friday.

Richer yields and a stronger dollar can dull the appeal of owning dollar-priced bullion but both factors have steadied in recent trade.

On Thursday, gold got a lift, pushing yields lower and prices of debt higher, after Federal Reserve Chairman Jerome Powell said that it isn’t time to consider exiting easy-money policies, as the U.S. combats the economic crisis wrought by the COVID-19 pandemic.

“Now is not the time to be talking about exit,” Powell said in a webcast with Princeton University on Thursday.

“With the Fed Chair pledging to provide ample warning time before any such tapering so as to avoid a repeat of the infamous ‘taper tantrum’ of 2013, gold bulls can take heart from the continued central bank support that should limit the precious metal’s downside for a while longer,” wrote Han Tan, market analyst at FXTM, in a research note on Friday.

Over the long-run commodity analysts remain bullish on gold, particularly on the back of outsize U.S. government spending, which could devalue dollars and buttress gold prices.

Biden’s fiscal plan calls for a round of $1,400-per-person direct payments to most households, a $400-a-week unemployment insurance supplement through September, expanded paid leave and increases in the child tax credit and help for states with the COVID-19 vaccine rollout.

On Friday, investors also were digesting a report on December retail sales which fell for a third straight month, dropping 0.7 %. Economists polled by Dow Jones and The Wall Street Journal has forecast a 0.1% decline.

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