Gold extends losses as US bond yields firm, dollar rebounds

Gold prices fell on Friday, pressured by a surge in US Treasury yields and a rebound in the dollar, but the metal's jump to a two-week high in the previous session set it on track to record a small weekly gain.

FUNDAMENTALS

Spot gold fell 0.5% to $1,728.63 per ounce by 0121 GMT, after hitting its highest since March 1 in the previous session. US gold futures were down 0.3% at $1,728.00 per ounce.

The yield on the US 10-year Treasury note on Thursday rose above 1.75% for the first time in 14 months after the Federal Reserve pledged to look past inflation and keep interest rates near 0% until at least 2024.

Higher yields lift the opportunity cost of holding non-yielding bullion.

The dollar also climbed, making gold expensive for non-holders of the US currency.

The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, but the labour market is regaining its footing as an acceleration in the pace of vaccinations leads to more businesses reopening.

The Bank of England said Britain's economic recovery was gathering pace but policymakers were split over the prospects for longer-term improvement, dampening speculation about a reversal of stimulus.

The European Central Bank may need some time before the recently agreed acceleration in the pace of money printing, ECB President Christine Lagarde said on Thursday.

Switzerland in February sent gold to mainland China for the first time since September and shipments to India and Thailand rose to multi-year highs.

Palladium was little changed at $2,682.68, having risen over 7.3% to its highest since Feb. 28, 2020 on Thursday. Supply concerns emerged after the biggest producer of the metal, Russia's Nornickel Nickel, cut output estimates.

Silver fell 0.6% to $25.89 and platinum was down 0.7% at $1,198.19.