Gold futures were higher on Friday as U.S. Treasury yields rebounded after a spike in the previous session, with the yellow metal bolstered by inflation concerns and jitters about Thursday’s decline in equities .
Gold for delivery GCJ21 April
rose $ 7.60, or 0.4%, to $ 1,740.10 an ounce on Comex, on track for a weekly rise of 1.2%. May SIK21 money
it went off 1.6 cents, or 0.1%, at $ 26.335 an ounce, making up a weekly increase of 1.6%.
“The pull of the war continues between rising bond yields (which weigh on gold) and the anxiety on the stock markets (which tends to support),” analysts at Commerzbank wrote, in a note.
Treasury yields pulled back on Friday, with the rate on the 10-year note down 3.5 basis points near 1.684% after spinning to a 14-month high in the previous session. Bond yields jumped after the Federal Reserve confirmed the dovish tone of its monetary policy at its meeting on Wednesday but expressed little concern about tightening financial position. Higher yields can be negative for gold as they increase the opportunity cost of maintaining non-yielding assets.
Analysts argue that, despite higher bond yields, gold still has some traction as an inflation hedge, given the $ 1.9 trillion fiscal stimulus implemented by the Biden administration this month combined to the Fed’s easy monetary policies that are expected to see U.S. economic growth this year.