Gold prices hit one-week low as stronger dollar, bond yields weigh on market

Gold prices fell to a one-week low on Friday, and are on track for a further weekly decline, weighed down by a stronger dollar and rising US bond yields.

Spot gold was down 0.3% at $2,010.57 an ounce by 11:40 a.m. EDT (1540 GMT), after falling 0.7% earlier in the session.

US gold futures fell 0.2% to $2,015.80.

The dollar hit a one-month peak and is headed for its biggest weekly gain since February, making bullion less attractive to buyers holding other currencies.

Higher 10-year Treasury yields further reduced the appeal of zero-interest bullion.

However, Bob Haberkorn, senior market strategist at RJO Futures, said, “The upside to dollar strength is limited due to debt ceiling issues, which we will face for the next few weeks, which is where gold will benefit.”

Treasury Secretary Janet Yellen said there is still uncertainty about when the Treasury will run out of cash to pay off US government debts, which could come as soon as June 1.

Safe-haven bullion tends to benefit during times of economic or financial uncertainty.

Lukman Otunuga, a senior research analyst at FXTM, said the bullish trend in gold remains strong amid expectations of a rate cut by the Fed later this year.

However, Fed Governor Michelle Bowman reiterated the central bank’s stance on raising rates as still necessary to fight high inflation.

Spot silver fell 1.3% to $23.86 an ounce, down nearly 7% for its worst week in seven months.

Fawad Razakzada, market analyst at City Index, blamed the fall in the dollar and concerns over China’s economic recovery.

Platinum fell 2.8% to $1,063.43, while palladium fell 2.4% to $1,514.20. Nevertheless, both are set for weekly gains.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed)