US MIDDAY: gold dips

Gold slipped on Friday, under pressure from a firmer dollar and worries about rising global interest rates, but still found some support as a safe haven asset as world stock markets fell. The US dollar rose against a currency basket, heading for its strongest week in nearly 15 months, with major US equity indexes shedding around 1 percent a day after a plunge that confirmed a correction for the market. "Currently, there are two competing forces in the gold market," said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals.
"These include the investor who believes that in times of uncertainty, gold still offers a safe haven and the speculator who takes a short position and believes that the dollar will strengthen along with rising interest rates." Spot gold fell 0.3 percent to $1,314.49 an ounce by 2:05 pm EST (1905 GMT), just above Thursday's five-week low at $1,306.81. It was down 1.3 percent for the week so far, heading for a second straight weekly drop.
US gold futures settled down or 0.3 percent at $1,315.70. "It is likely that losses in stocks are causing some metal holders to liquidate in an effort to increase their capital," said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York.
"Remaining above $1,300 on an ugly week should be viewed as a positive signal." Although the dollar had strengthened, said Ole Hansen, head of commodity strategy at Saxo Bank, investors were watching to see if the US administration's planned tax cuts boosted the economy. "If it doesn't, it could have a negative growth impact, that's not going to be dollar-positive," he said.
A strong dollar makes gold costlier for holders of other currencies. The yield on benchmark 10-year US Treasuries, which tends to be the driver of global borrowing costs, was around 2.8 percent, just short of Monday's four-year high of 2.885 percent.
Rising yields increase the opportunity cost of holding non-yielding bullion. Silver fell 0.8 percent to $16.27 an ounce, having touched its lowest since December 22. Platinum lost 1.4 percent at $956 an ounce, having hit its lowest since January 10. Palladium fell 0.6 percent to $968.90, having hit its lowest since October. It was on track for its poorest weekly performance since October 2016.