Gold dips 1pc as US dollar and yields regain footing

Gold fell more than 1% on Friday after a rebound in US Treasury yields and the dollar index sent the metal back towards 9-month lows hit earlier in the week, clouding optimism the US stimulus bill would send prices up.

Spot gold fell 1.1% to $1,703.01 per ounce by 1142 GMT. The metal had slumped to a nine-month low of $1,676.10 on Monday. US gold futures fell 1.3% to $1,699.60.

"A reversal in both the dollar and US yields has taken the shine off gold notwithstanding the agreement on the stimulus bill, and even expectations of further fiscal stimulus as well. Those things haven't really assisted gold," said Ross Norman, an independent analyst.

Benchmark US Treasury yields rose back towards a more than one-year peak hit on March 5, increasing the opportunity cost of holding gold, while the dollar rebounded from an one-week low.

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.

Investors are now awaiting the US Federal Reserve meeting next week for direction on its monetary policy.

"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 fell 2% to $25.55 an ounce, but was on track for its biggest weekly rise since mid-February, with a 1.2% gain. Palladium was steady at $2,344.64.

Platinum lost 1.5% to $1,177.38 an ounce, but was set to post its largest weekly increase in four weeks, up 4.2%.