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Gold eyes second straight weekly fall as US yields gain

Fri Feb 26 2021

 

 

Gold prices hit their lowest in a week on Friday and headed for a second straight weekly decline as higher U.S. Treasury yields sapped the appeal of non-yielding bullion.

 

FUNDAMENTALS

* Spot gold was steady at $1,770.15 per ounce by 0046 GMT, having earlier fallen to its lowest since Feb. 19 at $1,764.90. Prices were down 0.6% for the week so far.

 

* U.S. gold futures fell 0.5% to $1,767.10.

 

* Gold dropped 1.9% on Thursday as rising economic expectations and inflation concerns vaulted benchmark U.S. Treasury yields to their highest since the pandemic began, helping lift the dollar.

 

* Higher yields increase the opportunity cost of holding gold, which pays no interest.

 

* Federal Reserve policymakers are shrugging off the surge in longer-term U.S. government bond yields as a sign of growing optimism about the economy, which could pick up steam as more people are vaccinated against COVID-19.

 

* U.S. jobless claims fell last week, suggesting the labor market was slowly regaining traction.

 

* Robust fiscal support and vaccinations could lead the United States to its strongest growth in decades, New York Fed President John Williams said on Thursday.

 

* China's net gold imports via Hong Kong fell in January as COVID-19-related restrictions reduced demand in the run-up to the Lunar New Year holiday.

 

* Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust fell 0.6% on Thursday.

 

* Silver gained 0.3% to $27.49 an ounce, while palladium was steady at $2,400.43. Platinum rose 0.1% to $1,217.93 and was set to mark its worst week since end-October with a 4.4% decline.

 

Source: Reuters