Gold faces first weekly decline in three as U.S. dollar rallies
· Gold prices were on course for a first weekly decline in three as elevated Treasury yields and a firm U.S. dollar dented safe-haven bullion’s appeal even as the metal steadied on the day.
· Spot gold was flat at $1,726.96 per ounce by 0126 GMT on Friday. U.S. gold futures were steady at $1,725.50 per ounce. The metal hit a one-week low of $1,721.46 in the previous session.
· For the week, the metal has lost over 1% as the U.S. dollar climbed against a basket of major currencies, leaping over a four-month high on Thursday.
· U.S. Treasury yields also jumped after the Treasury Department saw tepid interest for an auction of seven-year notes.
· Higher returns on Treasury bonds generally increase the opportunity cost of holding non-yielding bullion, while a strong dollar makes it expensive for non-U.S. buyers.
· Another bond market sell-off is likely in the next three months following the recent rout in financial markets, according to analysts polled by Reuters.
· Countries in Europe are re-enforcing COVID-19 restrictions as Germany, Europe’s largest economy, saw the highest surge in coronavirus cases since January, further raising doubts about the pace of economic recovery.
· Gold is often considered as a safe-haven investment at times of political and economic uncertainties.
· Asian markets are set to open higher on Friday after U.S. equities rose as investors weighed the outlook for economic growth and inflation and welcomed progress on vaccination rollouts.
· The number of Americans filing new claims for unemployment benefits dropped to a one-year low last week.
· Silver rose 0.1% to $25.05, holding above an over two-month low of $24.39 per ounce hit on Thursday.
· Palladium rose 0.2% to $2,614.51 and platinum fell 0.1% to $1,146.11.
Reference: CNBC
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