GOLD STEADY, SILVER DOWN

GOLD HELD a tight range on Friday, as uncertainty over the US Federal Reserve’s tapering timeline kept most investors on the sidelines.

But overall gains in the dollar this week put bullion on course to mark its first weekly decline in five.

Spot gold was last up 0.04 percent at $1 795.40 (about R25 449) an ounce by 5.23pm, while US gold futures fell 0.2 percent to $1 796.30 an ounce.

Bart Melek, head of commodity strategies at TD Securities, said a bounce in US yields were preventing speculative funds from convincingly moving into gold.

The benchmark US 10-year Treasury yield rose after economic data indicated high inflation could persist for some time. While gold is considered a hedge against inflation, higher yields translate into higher opportunity cost of holding non-interest bearing bullion.

“The elevated US producer price index data could on margin drive people to believe that the Fed could show slightly less accommodation down the road with tapering,” Melek added.

Gold investors closely monitor the Fed’s decisions, since non-yielding bullion tends to gain when interest rates are low.

Many gold market participants were waiting on the sidelines in part due to the uncertainty surrounding the Fed’s tapering timeline, said Commerzbank analyst Daniel Briesemann.

Elsewhere, silver fell 0.4 percent to $23.98 an ounce, while platinum dropped 0.8 percent to $969.71 an ounce, with both suffering weekly losses.

Palladium advanced 0.2 percent to $2 183.03 an ounce, but was down about 10 percent for the week.

Melek said rising concerns over vehicle manufacturing in China and elsewhere, with announcements from carmakers shuttering some production due to chip shortages, had pushed demand for auto-catalysts platinum and palladium lower.