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Gold edged lower on Friday, as a firmer
dollar made bullion more expensive for other currency holders,
although a pullback in the U.S. Treasury yields limited losses
for the safe-haven metal.
FUNDAMENTALS
* Spot gold was down 0.2% at $1,823.77 per ounce by
0127 GMT. Bullion lost 0.4% so far this week.
* U.S. gold futures were steady at $1,823.20.
* The dollar index held firm near a one-week high,
and was set for a weekly gain against its rivals.
* Benchmark U.S. 10-year Treasury yields slipped
from a more than one-month high hit on Thursday. Lower bond
yields reduce the opportunity cost of holding non-interest
bearing gold.
* Data on Thursday showed that fewer Americans filed new
claims for unemployment benefits last week, while producer
prices increased more than expected in April.
* Recent economic readings out of the United States have
sparked concerns over rising inflation and raised bets over an
earlier-than-expected Federal Reserve rate hike.
* The U.S. central bank has pledged to keep interest rates
low until the economy reaches full employment, and inflation
hits 2% and is on track to “moderately” exceed that level for
some time.
* Gold tends to benefit from lower interest rate environment
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as it reduces the opportunity cost of holding non-yielding
bullion.
* Fed Governor Christopher Waller said he expects inflation
to exceed the Fed’s 2% target for the next two years, but added
that the Fed would not raise rates until it sees inflation above
target for a long time, or excessively high inflation.
* Palladium gained 0.7% to $2,883.71 per ounce, but
was on track to post a second straight weekly loss with a drop
of about 2%.
* Silver was flat at $27.06 per ounce, while platinum
was up 0.6% at $1,212.88.
DATA/EVENTS (GMT)
1230 US Retail Sales MM April
1315 US Industrial Production MM April
1400 US U Mich Sentiment Prelim May
(Reporting by Shreyansi Singh in Bengaluru, Editing by Sherry
Jacob-Phillips)
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