Gold edged up from 5-month lows on Friday as the US dollar and bond yields slightly retreated from highs, but bullion was set for its fourth consecutive weekly decline on concerns the Federal Reserve would keep interest rates higher for longer.
Spot gold gained 0.2% to $1,892.02 per ounce by 0358 GMT, after touching its lowest since mid-March on Thursday.
US gold futures rose 0.4% to $1,921.90. “The US dollar has eased from recent highs and this has allowed gold to make a modest move higher.
There is likely some bargain hunting happening for the precious metal at these levels,“ KCM Trade Chief Market Analyst Tim Waterer said.
Benchmark 10-year US Treasury yields fell from their highest levels since October, while the dollar index dropped 0.3%, making non-yielding bullion less expensive for overseas buyers.
US 30-year yields also hit 12-year highs on Thursday, as strong economic data raised investor expectations of higher interest rates. “The dollar will need to take a bearish turn at some point for gold to rediscover its mojo.
Just how long gold will spend trading at sub $1,900 levels will depend on how long the dollar remains bolstered by high bond yields,“ Waterer added.
Investors now await Fed Chair Jerome Powell to deliver a talk on the economic outlook on Aug. 25 at the central bankers’ confab in Jackson Hole, Wyoming.
Reflecting bearish mood among gold investors, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, reported another reduction in holdings by 6.93 metric tons to their lowest since January 2020.
Spot silver jumped 0.6% to $22.82 an ounce. Platinum climbed 0.8% to $896.45 and palladium added 1% to $1,229.12, but both were set for weekly declines.
Investors are offloading Platinum Group Metals investments as moderating auto sales growth across major regions weighs on the market sentiment, ANZ analysts said in a note.
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