LONDON: Gold slipped more than 1% on Friday, weighed down by a jump in US Treasury yields and a rebound in the dollar, but bullion was still on course for its first weekly gain in three weeks. Spot gold fell 0.7% to $1,743.73 per ounce by 11:16 a.m. EDT (1516 GMT), after declining as much as 1.4%, having hit its highest price since March 1 at $1,758.45 on Thursday. For the week, however, prices were up about 0.9%.
US gold futures slipped 0.8% to $1,744.20.
“While overall, gold market is bullish short-term, with expectations of a break higher through $1,760-65, caution about fresh 10 and 30-year (Treasury) auctions and the CPI report next week are keeping yields supported, keeping gold’s advance in check,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
“Yields are driving most markets at moment, directly impacting USD and stocks and all three matter to gold with varying impact.”
US producer prices increased more than expected in March, resulting in the largest annual gain in 9-1/2 years, fitting with expectations for higher inflation as the economy reopens.
“This type of potentially inflationary environment is generally viewed as supportive for gold,” said David Meger, director of metals trading at High Ridge Futures. In a potential fillip to gold’s safe-haven appeal, US Federal Reserve Chair Jerome Powell on Thursday signalled the central bank is nowhere near reducing its economic support, and warned an uptick in COVID-19 cases could slow the recovery.
Silver slipped 0.8% to $25.23, while platinum shed 2.8% to $1,195.16. Palladium rose 0.5% to $2,637.00, but was on track for its biggest weekly fall since the week ending Feb. 26.