Gold faces worst week in 12 as US Treasury yields firm

Gold prices fell to their lowest in nearly three months on Friday and headed for their worst week since end-November, as recent strength in U.S. Treasury yields dented the non-yielding metal’s appeal.

FUNDAMENTALS

Spot gold fell 0.4% to $1,769.26 per ounce by 0100 GMT, having touched its lowest since Nov. 30 at $1,765.35 earlier in the session. Prices have declined 3% so far this week.

U.S. gold futures slipped 0.5% to $1,766.40.

Benchmark U.S. Treasury yields edged higher, having hit a near one-year peak earlier in the week. Higher yields increase the opportunity cost of holding bullion, which pays no interest.

The dollar was also set to mark a weekly gain, making gold expensive for holders of other currencies.

U.S. jobless claims unexpectedly increased last week, raising the possibility of a second straight month of tepid job growth despite declining new COVID-19 infections.

Switzerland’s monthly gold exports to India in January reached their highest since May 2019, though exports to China and Hong Kong remained at rock bottom, customs data showed on Thursday.

Silver eased 0.6% to $26.86 an ounce, after falling over 1.8% so far this week, its worst since mid-January.

Platinum slipped 0.7% to $1,266.09 and was on course to mark its third straight weekly gain, while palladium shed 0.3% to $2,345.02.

DATA/EVENTS (GMT)
0700 UK Retail Sales MM, YY Jan
0700 UK Retail Sales Ex-Fuel MM Jan
0745 France CPI (EU Norm) Final MM, YY Jan
0815 France Markit Mfg, Serv, Comp Flash PMIs Feb
0830 Germany Markit Mfg, Serv, Comp Flash PMIs Feb
0900 EU Markit Mfg, Serv, Comp Flash PMIs Feb
0930 UK Flash Mfg, Serv, Comp PMIs Feb
1445 US Markit Mfg, Serv, Comp Flash PMIs Feb
1500 US Existing Home Sales Jan

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