Gold slips as yields climb, faces weekly drop
2022.04.01 12:16
FILE PHOTO: Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk/
By Bharat Gautam
(Reuters) – Gold eased on Friday and was headed for a weekly fall, as higher Treasury yields dented the appeal of zero-yield bullion, with a stronger dollar adding further pressure.
Spot gold was down 0.4% at $1,929.90 per ounce by 0825 GMT. U.S. gold futures fell 0.9% to $1,936.
“It is in particular the developments in the fixed income markets with yields rising again,” that are pressuring gold, said Quantitative Commodity Research analyst Peter Fertig.
Yields on the benchmark U.S. 10-year Treasury note rose back above 2.4% on Friday after dropping to a one-week low in the previous session. Higher yields increase the opportunity cost of holding gold, which yields nothing. [US/]
The U.S. dollar firmed for a second straight session, making greenback-priced gold less appealing. [USD/]
Gold is on course to end the week about 1.4% lower, having dropped earlier this week on signs of progress in talks between Russia and Ukraine.
Negotiations aimed at ending the five-week war were set to resume even as Ukraine braced for further attacks in the south and east.
A key U.S. jobs report that could help the Federal Reserve decide whether to order an interest rate hike of up to 50 basis-points next month is due later on Friday. [USD/]
“A downside surprise on employment and earnings should not dent market rate hike pricing for 2022, with the Fed shifting to inflation-fighting mode,” said Stephen Innes, managing partner at SPI Asset Management in a note.
“By contrast, a beat on jobs data would add weight to the idea that the U.S. economy has more underlying momentum than the Fed previously assumed.”
Spot silver shed 0.5% to $24.65 per ounce and is set for a weekly dip.
Platinum inched 0.1% higher to $984.56, while palladium rose 0.6% to $2,274.34. Both metals were on course for a fourth consecutive weekly loss.
