Gold prices slump as U.S. dollar and yields rise, but metal nurses meager weekly gain

Gold prices slump as U.S. dollar and yields rise, but metal nurses meager weekly gain

Futures for gold on Friday headed lower, but the precious metal was holding on to a slight weekly gain, as investors sold bullion at the end of the week amid a rise in U.S. government bond yields and a firming of the dollar.

“Yes, yields have risen along with the dollar, which is not great news for the buck-denominated metal,” wrote Fawad Razaqzada, market analyst at ThinkMarkets, in a research note.

That said, Razaqzada speculates that signs of a long haul in the economic recovery from the COVID-19 pandemic, highlighted by stubbornly high claims for joblessness in America, and the Federal Reserve’s commitment to maintaining interest rates near 0%, are factors that should limit the decline for gold, if not eventually help it to overcome its near-term softness.

“Therefore, I think bond yields will likely struggle to rise further than they already have, and the US dollar could remain under pressure. As a result, buck-denominated gold could be about to pop back higher,” he wrote.

The buck, as gauged by the ICE U.S. Dollar IndexDXY, was up 0.1% but down 0.5% so far this week, while the yield for the 10-year Treasury note BX:TMUBMUSD10Y was at around 1.18% Friday, holding around its highest level since March.

Against that backdrop. Gold for April delivery 


was trading off $13,80, or 0.7%, at $1,813 an ounce, following a 0.9% slide in the prior session. On Wednesday, prices notched their highest settlement since Feb. 1, FactSet data show.

Meanwhile, March silver


was picking up 4 cents, or 0.2%, to trade around $27.10 an ounce, following a 0.1% slide on Thursday.

For the week, gold is maintaining a gain of less than 0.1%, while silver is headed for a weekly advance of about 0.3%, according to FactSet data based on the most-active contract.

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