Gold costs slipped on Friday, weighed by an increase in Treasury yields on possibilities of U.S. loan fee climbs and a more grounded dollar. Spot gold was down 0.3% at $1,816.22 per ounce by 13:56 ET (1856 GMT). U.S. gold futures GCv1 settled down 0.3% at $1,816.50. Benchmark U.S. 10-year Treasury yields US10YT=RR firmed, while the dollar rose 0.4% against its opponents =USD, making bullion costlier for overseas purchasers. USD/US/Gold acquired briefly after the arrival of data showing retail deals tumbled by 1.9% in December as Americans battled with deficiencies of data because of production chain bottlenecks and an explosion of COVID-19 infections.
The weak data this week could eventually either cause a sell-off in wider markets or prompt the Federal Reserve to curb rate hike expectations, and gold gets a tailwind either way, Streible added.
Gold is acting as a placeholder in people’s portfolios “until the dust settles” in terms of where the economy is going, said Philip Streible, chief market strategist at Blue Line Futures in Chicago.
However, overall declines in the dollar this week put bullion on track for a weekly gain of about 1.1%.
“Considering that markets will ultimately remain intensely focused on the Fed’s exit, fewer sources of upside flow in the coming weeks could leave gold prices vulnerable to a consolidation”, TD Securities said in a note.
Gold is considered a hedge against surging inflation, but interest rate hikes translate into higher opportunity cost of holding non-yielding bullion.
Spot silver fell 0.9% to $22.86 an ounce, and was en route to post a 2.5% weekly gain.
Platinum was down 0.2% to $967.32 and was set to gain about 1.2% this week, while palladium XPD= fell 0.3% to $1,882.12 and poised for a weekly drop of nearly 2.7%.
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