Gold flat as robust US economic data counters lower yields

Gold prices were steady on Friday as robust US economic data nullified support from lower Treasury yields, although the metal looked set to post a second straight weekly gain on inflationary concerns.

FUNDAMENTALS

Spot gold was steady at $1,763.46 per ounce by 0113 GMT. US gold futures were down 0.2% to $1,763.80 per ounce.

Gold was set for its best week in five as inflationary concerns over massive fiscal aids and ultra-low interest rates across the globe kept the metal supported.

US Treasury yields plummeted to one-month lows on Thursday after the US government imposed a broad array of sanctions on Russia as punishment for alleged misdeeds, including interfering in the 2020 US election.

Low bond returns reduce the opportunity cost of holding non-yielding bullion.

Weighing on gold, data showed a better-than-expected rebound in US retail sales in March, while weekly initial claims for state unemployment benefits dropped to the lowest level since mid-March 2020.

China's economic recovery from a coronavirus-induced downturn earlier last year likely accelerated rapidly in the first quarter, driven by improved demand at home and abroad and continued government support for smaller companies.

Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust, fell 0.3% on Wednesday from Tuesday.

Silver was flat at $25.85 per ounce, but up for a second straight week.

Palladium was steady at $2,741.84 but up about 4% for the week. Platinum gained 0.5% to $1,198.21.