Gold set for first weekly drop in three as yields, dollar strengthen

© Reuters. FILE PHOTO: An ingot of 99.99 percent pure gold is cast 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 prices dipped on Friday and were on track for their first weekly loss in three, as rising U.S. Treasury yields and a firmer dollar dented bullion's appeal. was down 0.2% at $1,947.36 per ounce, as of 0829 GMT. U.S. rose 0.2% to $1,952.10. "The outlook for gold is subdued as rising rates obviously weigh, but until we break the trading range (between $1,930 to under $2,000) in a convincing manner ... we really don't have much of a direction for gold," said Michael McCarthy, chief strategy officer at Tiger Brokers, Australia. Benchmark extended gains as Federal Reserve officials took a hawkish tone on tightening policy, cementing the view that the U.S. central bank will hike interest rates aggressively as it fights soaring inflation. [US/] Gold is highly sensitive to rising U.S. short-term interest rates and higher yields, which increase the opportunity cost of holding non-yielding bullion. A stronger U.S. dollar could also pressure gold, while geopolitical uncertainty remains a support; gold price is stuck in the middle of those two conflicting currents, McCarthy said. [USD/] A firmer dollar makes greenback-priced gold less attractive for overseas buyers. Gold is down about 1.3% so far this week. Prices rose to near the key mark of $2,000 per ounce on Monday on safe-haven demand and mounting worries over inflation, only to pull back and hit a two-week low in the previous session. "With stagflation moving from a potential tail risk to reality, investors worldwide are turning to gold as a keen portfolio diversifier," Stephen Innes, managing partner at SPI Asset Management said in a note. Spot silver fell 1.3% to $24.32 per ounce, while platinum retreated 0.6% to $962.53, both poised for weekly losses. Palladium was little changed at $2,422.88.

Gold set for first weekly drop in three as yields, dollar strengthen
Gold heads for weekly fall as yields, dollar climb© Reuters. FILE PHOTO: An ingot of 99.99 percent pure gold is cast 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 prices dipped on Friday and were on track for their first weekly loss in three, as rising U.S. Treasury yields and a firmer dollar dented bullion's appeal.

was down 0.2% at $1,947.36 per ounce, as of 0829 GMT. U.S. rose 0.2% to $1,952.10.

"The outlook for gold is subdued as rising rates obviously weigh, but until we break the trading range (between $1,930 to under $2,000) in a convincing manner ... we really don't have much of a direction for gold," said Michael McCarthy, chief strategy officer at Tiger Brokers, Australia.

Benchmark extended gains as Federal Reserve officials took a hawkish tone on tightening policy, cementing the view that the U.S. central bank will hike interest rates aggressively as it fights soaring inflation. [US/]

Gold is highly sensitive to rising U.S. short-term interest rates and higher yields, which increase the opportunity cost of holding non-yielding bullion.

A stronger U.S. dollar could also pressure gold, while geopolitical uncertainty remains a support; gold price is stuck in the middle of those two conflicting currents, McCarthy said. [USD/]

A firmer dollar makes greenback-priced gold less attractive for overseas buyers.

Gold is down about 1.3% so far this week. Prices rose to near the key mark of $2,000 per ounce on Monday on safe-haven demand and mounting worries over inflation, only to pull back and hit a two-week low in the previous session.

"With stagflation moving from a potential tail risk to reality, investors worldwide are turning to gold as a keen portfolio diversifier," Stephen Innes, managing partner at SPI Asset Management said in a note.

Spot silver fell 1.3% to $24.32 per ounce, while platinum retreated 0.6% to $962.53, both poised for weekly losses. Palladium was little changed at $2,422.88.