Gold prices dip as dollar, bond yields rise; US inflation data in focus

Gold prices fell on Friday as a stronger dollar and an uptick in U.S. Treasury yields weighed on the safe-haven metal, while investors awaited U.S. personal consumption data later in the day to gauge inflationary pressure.

Spot gold fell 0.4% to $1,887.90 per ounce by 0653 GMT. Bullion has risen 0.4% this week, on track for its fourth straight weekly gain.

U.S. gold futures slipped 0.3% to $1,892.30.

"Gold has been a little bit on the defensive side. Technically it was very overbought and on the fundamental side, the dollar had a big move up yesterday and that started to impact gold," ED&F Man Capital Markets analyst Edward Meir said.

"Gold is likely to consolidate around this $1,900 mark for a little while longer. Maybe with the next set of numbers that are more inflationar, we could start another move up."

The dollar index was up 0.1%, while the U.S. 10-year Treasury yield rose to 1.617%, translating into higher opportunity cost for holding non-yielding bullion. [US/] [USD/]

Meanwhile, the New York Times reported on Thursday that U.S. President Joe Biden will seek $6 trillion in federal spending for the 2022 fiscal year.

Also on investors' radar is the U.S. personal consumption report due later in the day.

"It's likely that even if inflation is higher than expected, the central bankers are going to be still dovish," Avtar Sandu, senior commodities manager at Phillip Futures, said in a note.

"What really matters for gold are real rates ... central bankers would continue to keep the rates low, which would be bullish for gold."

Spot gold may test a resistance at $1,911, Reuters technical analyst Wang Tao said. [TECH/C]

Silver fell 0.9% to $27.60 per ounce, and platinum eased 0.5% to $1,174.17.

Palladium rose 0.3% to $2,813.78, with prices getting a fillip after Russia's Nornickel projected a wider deficit in 2021.

 

(Reporting by Brijesh Patel in Bengaluru, Editing by Sherry Jacob-Phillips and Ramakrishnan M.)