Gold retreats as US yields rise; eyes on US GDP data

Gold fell on Thursday, giving up early gains as US Treasury yields rose ahead of US economic data, while persistent supply concerns pushed palladium to an all-time peak.

Spot gold edged 0.3% lower to $1,776 per ounce by 1204 GMT. US gold futures rose 0.1% to $1,776.10 per ounce.

"Whenever the US yields have pushed up, gold has gone lower and we're seeing the effects of that today," said CMC Markets UK's chief market analyst Michael Hewson.

"Gold's (next) move will be dictated by the U.S data. Today's Q1 GDP report is important. But it's the jobless claims numbers that I'm interested in. If they come below 600,000 for a third week in a row, that will then shift the market consensus to non-farm payrolls next week."

US economic growth likely accelerated in the first quarter, fuelled by massive government aid to households and businesses.

US Treasury yields advanced to 1.66, increasing the opportunity cost of holding non-interest paying gold.

Meanwhile, Fed Chair Jerome Powell said on Wednesday that "it is not time yet" to begin discussing any change in policy after the US central bank left interest rates and its bond-buying programme unchanged.

US President Joe Biden also unveiled a sweeping $1.8 trillion package plan for families and education in his first speech to Congress.

"The gold market lacks confidence. Having reached $1,790 overnight and once again failed to challenge $1,800, the conviction among traders remain low," said Saxo Bank analyst Ole Hansen.

Elsewhere, auto-catalyst metal palladium rose 0.7% to $2,948.15 per ounce, after hitting a record high of $2,963.07 on concerns of a deficit in the market.

Platinum eased 0.1% to $1,218.05 and silver gained 0.7% to $26.34 per ounce.