Gold slips from one-month high as dollar, bond yields stage rebound

Gold retreated from a over one-month peak hit in the previous session, weighed by rebound in the dollar and US Treasury yields, though it was still on course to register its first weekly gain in three

By Sumita Layek

(Reuters) - Gold retreated on Friday from a more than one-month peak hit in the previous session, weighed by a rebound in the dollar and U.S. Treasury yields, though it was still on course to register its first weekly gain in three.

Spot gold fell 0.6% to $1,745.99 per ounce at 0914 GMT, having hit its highest since March 1 at $1,758.45 on Thursday. For the week, prices were up 1% so far.

U.S. gold futures slipped 0.7% to $1,745.20.

"Gold's had a fairly decent week on the back of weaker U.S. yields and the dollar," but they are slightly up now and that's weighing on prices, said CMC Markets UK's chief market analyst, Michael Hewson.

The dollar and benchmark U.S. yields have rebounded from two-week lows, making gold less appealing. [US/][USD/]

Data out of China showed factory-gate prices rose at their fastest annual pace since July 2018 in March, while the producer price index (PPI) rose 4.4%. U.S. PPI data is due later in the day.

"If we get a similarly strong number (in U.S. PPI), that could reawaken the inflation genie and put upward pressure on U.S. yields, and that in turn will hurt gold," Hewson said.

However, on Thursday Federal Reserve Chair Jerome Powell reiterated that higher inflation numbers that would require the Fed to react with rate hikes were unlikely.

"Gold's retreat from last year's peak is a 'mini-correction' in a longer bull market," said Davis Hall, head of capital markets in Asia at Indosuez wealth management.

"A lot of that speculative froth has been withdrawn as bitcoin picked up the baton... (but) as long as real yields remain flat to negative, gold has that underlying long-term support."

Silver eased 0.9% to $25.20, while platinum fell 1.3% to $1,214.21.

Palladium rose 0.1% to $2,626.41, but was on track for its biggest weekly fall since the week ending Feb. 26.

 

(Reporting by Sumita Layek in Bengaluru; Additional reporting by Tom Westbrook; Editing by Pravin Char)