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U.S. Yields Fall, Gold Gains On Track For Weekly Increase

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U.S. Yields Fall, Gold Gains On Track For Weekly Increase

(CTN News) –  The gold price drifted higher on Friday, helped by a drop in.

Treasury yields and setting the metal on a path for a fourth straight week of gains, as investors took stock of the recent inflation data out of the United States.

Spot gold rose 0.5% to $1,798.86 per ounce by 1800 GMT and was headed for a more than 1% weekly rise. U.S. gold futures also settled up 0.5% at $1,815.5.

“Currently the gold market is seeing some short-covering and is supported by lower yields,” said Bart Melek, head of the commodity strategy at TD Securities.

U.S. Treasury yields dipped after a volatile

U.S. Treasury yields dipped after a volatile week as investors evaluated whether an apparent slowdown in inflation increases could reduce the speed of Federal Reserve interest rate hikes.

Data released earlier this week indicated that inflation in the U.S. has cooled down, following which market participants toned down expectations of an aggressive rate hike by the Fed.

However, recent Fed commentary continues to be hawkish and has stopped the metal from breaking above the $1,800 level.

Gold’s rally after cooler CPI numbers

“Gold’s rally, after cooler CPI numbers, stopped in its tracks as the market believes inflation will continue to be a problem. Fed speakers have also suggested they can’t afford to relinquish the fight against inflation,” Melek added.

Gold tends to do well in a low-interest environment as it yields no interest.

“Rising risk appetite as seen through surging stocks and bond yields … have so far prevented the yellow metal from making a decisive challenge at key resistance above $1,800,” Saxo Bank analyst Ole Hansen said.

Gold demand was restrained in India this week due to high domestic prices, while Chinese bullion importers held off on big purchases because of Taiwan-related uncertainty.

Spot silver rose around 2% to $20.70 per ounce, platinum was up 0.3% at $958.57, while palladium fell 1.8% to $2,235.09

 

Published in CTN, August 13th, 2022

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