Gold advanced, paring a weekly loss as the US dollar slipped and bond yields retreated from session highs.
The US dollar fell against most Group-of-10 currencies, making bullion more attractive for investors holding other currencies. Treasury futures pared losses, while cash yield curves retreated from the steepest levels of the session after softer-than-expected US personal spending figures.
Spot gold added 0.3 percent to US$1,731.89 an ounce, but dropped 0.69 percent from a week earlier.
The precious metal posted its first weekly loss in three, underscoring its fitful comeback from a nine-month low. Optimism over a recovery from the pandemic, a resilient US dollar and a rise in bond rates that reduce the appeal of non-interest-bearing bullion continue to thwart a sustained rebound in the metal.
“Gold prices remain in limbo despite recent weakness in real yields, highlighting the change in regime from an inflation-hedge product into a safe-haven asset today,” TD Securities analysts led by Bart Melek said in a note. “This continues to place a wet blanket on the prospects of increasing investment flows.”
US President Joe Biden set a goal of administering 200 million COVID-19 vaccine doses by the end of next month, doubling his target for his first 100 days in office. US stocks on Friday rose on optimism over the vaccine rollout and after the US Federal Reserve freed banks from restrictions on dividends.
US household spending declined last month and incomes fell as the initial boost from stimulus checks at the start of the year faded. A key measure of inflation remained tepid.
Due to the very weak inflation prints seen at the start of the COVID-19 pandemic, year-on-year increases in the price metrics are expected to be large, starting with this month’s data, although Fed officials expect any surge in prices will prove temporary.
“While there will be higher inflation in the US, it is important to keep in mind that this is first a reflection of the strong growth backdrop and, second, unlikely to last,” Julius Baer Group Ltd annalyst Carsten Menke wrote in a note. “It is not the kind of inflation that will lift safe-haven demand and lead to lastingly higher gold and silver prices.”
‧ Silver for May delivery rose US$0.06 to US$25.11 an ounce and copper for May delivery rose US$0.09 to US$4.07 a pound.
Additional reporting by Reuters and AP
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