Business World

Gold reels under pressure from dollar’s bounce


NEW YORK/LONDON — Gold eased on Friday, heading towards its biggest weekly decline in twoand-a-half months, as the US dollar climbed from last week’s three-year low on the back of higher US Treasury yields.

Bullion has come under heavy pressure this week from a recovery in the greenback and expectatio­ns that the US Federal Reserve will press ahead with interest rate increases this year, which tend to weigh on non-yielding gold.

Spot gold was down 0.20% at $1,328.74 by 1:37 p.m. EST (1837 GMT), its fifth losing session in six. US April gold futures settled down $2.40, or 0.2%, at $1,330.30 per ounce.

Spot prices have shed 1.4% this week, their biggest weekly decline since early December, after failing to sustain a brief push back above $1,360 an ounce last Friday.

“( Recent) multi- year highs in yields is definitely a factor for metals today,” said Mike O’Donnell, markets strategist at RJO Futures.

US Treasury prices gained on Friday and though benchmark 10year US Treasury yields slipped, they held near a four-year high reached on Wednesday.

Bonds were also supported by the completion of $ 258 billion in new supply this week, which was the second-largest ever over a three-day period.

A weak euro also pressured gold. “Further weakness in gold and the euro could be the start of a fresh trend and caution for bulls is in order,” said Friedberg Mercantile Group’s Sholom Sanik.

Minutes of the Fed’s latest rate- setting meeting were released this week and emphasized confidence in the need to keep raising interest rates.

“Despite the hawkish stance by the Fed, which drove this move in the gold price, we are still above the $1,300 mark,” said Think Markets’ chief market analyst Naeem Aslam, flagging a key support level. “We think some participan­ts were surprised and unprepared, which created the largest weekly loss for this year.”

Meanwhile, palladium increased 0.80% at $1,046.60 per ounce, likely boosted on industrial demand for catalytic converters in gasoline-burning vehicles, traders said. Silver dropped 0.60% at $16.51 an ounce, heading for a 0.90% weekly decline. Platinum gained 0.20% at $995.80 an ounce, but down 0.60% on the week. —

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