Gold futures on Friday were lower, but the precious metal held on to some weekly gain, as investors sold bullion at the weekend amid rising U.S. government bond yields and the dollar’s consolidation.
“Yes, yields have gone up with the dollar, which is not good news for the buck-denominated metal,” Fawad Razaqzada, a market analyst at ThinkMarkets, wrote in a research note.
That said, Razaqzada points out signs of a long slowdown in economic recovery from the COVID-19 pandemic, marked by high claims for unemployment in America, and the commitment of the Federal Reserve to keep interest rates close to 0%, the traits that should limit the decay for gold, if not ultimately help it to overcome its near-term softness.
“So I think bond yields are likely to struggle to rise longer than they already are, and the U.S. dollar could remain under pressure. As a result, gold denominated by a buck could return higher, ”he wrote.
The buck, as measured by the ICE US Dollar IndexDXY, rose 0.1% but down 0.5% so far this week, while the yield for the 10-year BX Financial note: TMUBMUSD10Y was at around 1.18 % Friday, holding around its highest level since March.
Against that background. Gold for April GC00 delivery,
GCJ21,
trading off $ 13.80, or 0.7%, at $ 1,813 an ounce, after a 0.9% slip in the previous session. On Wednesday, prices noted their highest resolution since Feb. 1, the FactSet data show showed.
Meanwhile, March SI00 money,
SIH21,
raising 4 cents, or 0.2%, to trade around $ 27.10 an ounce, after a 0.1% slip Thursday.
For the week, gold maintained a gain of less than 0.1%, while silver managed for a weekly advance of about 0.3%, according to FactSet data based on the most active contract.