By Deep Kaushik Vakil
(Reuters) – Gold prices fell to a one-week low on Friday, and are on track for a weekly dip, weighed down by a stronger dollar and an uptick in U.S. bond yields.
Spot gold was 0.3% lower at $2,010.57 per ounce by 11:40 a.m. EDT (1540 GMT), after falling as much as 0.7% earlier in the session.
U.S. gold futures fell 0.2% to $2,015.80.
The dollar rose to one-month peak and is heading for its biggest weekly gain since February, making bullion less attractive for buyers holding other currencies. [USD/]
Higher 10-year Treasury yields further dimmed zero-interest bullion’s appeal. [US/]
However, “the upside is limited for dollar strengthening due to the debt ceiling issues that we will be going through for the next couple of weeks, where gold will benefit if that lingers on,” said Bob Haberkorn, senior market strategist at RJO Futures.
Treasury Secretary Janet Yellen said there was still uncertainty about exactly when Treasury would run out of cash to pay U.S. government debts, which could come as early as June 1.
Safe-haven bullion tends to gain during times of economic or financial uncertainty.
The bullish sentiment in the gold market still stands strong over expectations of the Fed cutting rates later this year, said Lukman Otunuga, a senior research analyst at FXTM, adding that traders have practically priced in a 25-basis-point cut by September.
Fed Governor Michelle Bowman, however, reiterated the central bank’s stance on raising rates if necessary to fight still-high inflation.
Spot silver fell 1.3% to $23.86 per ounce, down about 7% for its worst week in seven months.
Fawad Razaqzada, market analyst at City Index, attributed the drop to the dollar rebound and concerns over China’s economic recovery.
Platinum dropped 2.8% to $1,063.43, while palladium lost 2.4% at $1,514.20. Still, both are set for weekly gains.
(Reporting by Deep Vakil and Seher Dareen in Bengaluru; Editing by Sonia Cheema, Subhranshu Sahu, Shailesh Kuber and Shilpi Majumdar)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.