NEW YORK: Gold prices rose on Friday, helped by a pullback in US Treasury yields and growing inflation concerns, with investors awaiting more clarity on the pace of policy tightening by the Federal Reserve.
Spot gold was up 0.3% at $1,831.23 per ounce by 10:01 a.m. ET (1501 GMT), poised for a weekly gain of about 1.3%.
US gold futures fell 0.3% to $1,832.50.
“Yields are backing off just a touch, so I think gold is just catching its breath right now to figure out what its next move is,” said Philip Streible, chief market strategist at Blue Line Futures in Chicago.
“There is a lot of discussion about possibility of an emergency rate hike. But in addition to multiple rate hikes, other Fed officials have downplayed Bullard’s hawkishness.”
Benchmark 10-year US Treasury yields backed off after topping 2% for the first time in nearly three years in the previous session.
Data showing a spike in US consumer prices has increased pressure on the Fed to take a stronger stand to fight inflation. Fed fund futures are pricing in chance of 50 basis points hike at next month’s policy meeting.
St. Louis Fed Bank President James Bullard said on Thursday he wants a full percentage point of rate hikes over the next three policy meetings.
While gold is considered a hedge against soaring inflation, a resultant hike in interest rates would increase the opportunity cost of holding non-yielding bullion.
“Gold market is just waiting for a lift-off on the Fed. Prices have been trading in a range-bound market around the $1,800 pivot and is technically building support within this range,” said Daniel Pavilonis, senior market strategist at RJO Futures.
Silver fell 0.3% to $23.12 per ounce, but remains poised for a weekly gain of about 2.4%. Platinum was down 1.3% at $1,012.84, while palladium slipped 2.3% to $2,203.94.