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