Gold prices were flat on Friday but on
course for their second straight weekly decline, with worries
over major central banks potentially implementing big interest
rate hikes to contain runaway inflation weighing on bullion
Spot gold was up 0.1% at $1,823.67 per ounce, as of
0439 GMT, after hitting a one-week low of $1,820.99 earlier in
the session. U.S. gold futures fell 0.2% to $1,825.80.
Gold prices have dropped about 0.8% this week.
The U.S. Federal Reserve’s commitment to reining in
40-year-high inflation is “unconditional,” its chair Jerome
Powell told lawmakers, even as he acknowledged that sharply
higher interest rates may push up unemployment.
“The U.S. dollar remains firm and expectations now lean
towards a 75-basis-point Fed hike in July. The TIPS spread – a
market-based proxy for inflation expectations – is also near a
four-month low, and these have kept a lid on any gold rally,”
City Index senior market analyst Matt Simpson said.
The dollar was slightly lower, making
greenback-priced gold less expensive for buyers holding other
However, benchmark U.S. 10-year Treasury yields firmed,
limiting demand for gold.
Higher interest rates and bond yields raise the opportunity
cost of holding bullion, which yields no interest.
“Gold looks vulnerable over the near-term, given its
inability to break $1,850, its 200-day average, this week,”
Simpson said, adding that, “were it not for the fear of a global
recession then gold would likely be lower than it already
SPDR Gold Trust , the world’s largest gold-backed
exchange-traded fund, said its holdings fell 0.81% to 1,063.07
tonnes on Thursday from 1,071.77 tonnes a day earlier.
Spot silver firmed 0.3% to $21.00 per ounce and
platinum rose 0.9% to $914.99, but both were set for
Palladium climbed 1.5% to $1,871.48, and has gained
about 3.2% this week.
(Reporting by Bharat Govind Gautam in Bengaluru; Editing by
Rashmi Aich and Subhranshu Sahu)
Financial Post Top Stories
Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.
By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300