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

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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 
GC00,
-0.83%

GCJ21,
-0.83%

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
SI00,
+0.05%

SIH21,
+0.05%

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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