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Gold prices slip as surging U.S. Treasury yields lift dollar

Reuters  |  BENGALURU 

By Apeksha Nair

BENGALURU (Reuters) - Gold prices edged down on Friday to near their lowest levels this year, pressured by a firm U.S. dollar amid surging yields.

Spot gold was down about 0.1 percent at $1,289.35 per ounce at 0657 GMT, after hitting its lowest since Dec. 27 in the previous session at $1,285.41.

The was heading for its biggest weekly decline since early December.

U.S. gold futures for June delivery were 0.1 percent lower at $1,288.60 per ounce.

The dollar held near a five-month peak against a basket of currencies on Friday thanks to the benchmark yield topping a seven-year high.

"The 10-year U.S. yields put the dollar on a firm foot and put pressure on metals and gold," said a Hong Kong-based trader, adding that some "risk-on" sentiment in markets today was also adding pressure.

A stronger greenback makes dollar-denominated gold more expensive for users of other currencies, while higher U.S. yields dampen the appeal of non-yielding bullion.

"$1,285 has been good support for the past couple of days, so that's the first support we'll see if it (spot gold) can hold," the said. He declined to be identified as he was not authorised to speak with media.

Meanwhile, Asian stocks were treading water on Friday as investors kept a cautious watch on developments in U.S.-trade negotiations.

U.S. said on Thursday that had become "very spoiled" on trade with the and cast doubt on the success of his efforts to rebalance the relationship with as high-stakes U.S.-negotiations opened in

Trump sought on Thursday to placate North Korea's after threatened to scrap an unprecedented summit.

"Failure of the U.S. to reach any trade deal with China, as Trump has already indicated that there may not be a favourable outcome, could stimulate some demand for gold," said Naeem Aslam, at

Spot gold still targets $1,302 per ounce as it has stabilized around a support at $1,287, said.

In other metals, silver was little changed at $16.43 an ounce.

Palladium rose 0.1 percent to $979.15, while platinum was 0.4-percent lower at $885.24 per ounce after hitting a five-month low at $879 on Thursday.

However, all three of those metals were heading for weekly losses.

(Reporting by in Bengaluru; Editing by and Gopakumar Warrier)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, May 18 2018. 12:45 IST
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