GOLD DOWN, PLATINUM UP

GOLD PRICES retreated on Friday as a rebound in US bond yields and a surprise increase in September retail sales dented the metal’s appeal as a safe-haven asset.

Spot gold price dropped 1.5 percent to $1 769.60 (about R26 143) an ounce by 3.51pm. By 6.20pm, the price had inched higher to R1 773.75 an ounce.

US gold futures slipped 1.6 percent to $1 768.50 an ounce.

“Gold has everything going against it. Real rates are rising, equities are higher, so is bitcoin,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

US retail sales unexpectedly rose in September, boosting equities, and extending losses in risk-hedge gold.

Raising gold’s opportunity cost, US benchmark 10-year Treasury yields recovered from a more than one-week low hit on Thursday.

“Expectations are growing that the Fed (US Federal Reserve) and other central banks are going to tighten their monetary policy, which should keep yields supported, and when yields rise gold tends to struggle,” said Fawad Razaqzada, analyst with ThinkMarkets.

“Investors are, however, likely expecting only a moderate tightening from major central banks and that shouldn’t cause too much of a problem for gold as investors hedge against elevated price levels.”

While most Fed policymakers agree the central bank could start reducing its monthly bond purchases as soon as next month, they are sharply divided over inflation and what they should do about it.

Gold is often considered an inflation hedge, although reduced stimulus and interest rate hikes push government bond yields up, raising the opportunity cost of holding non-yielding bullion.

Spot silver fell 1 percent to $23.31 an ounce. Platinum edged up 0.1 percent to $1 056.58, while palladium fell 1.5 percent to $2 097.47. I Reuters