Gold set for worst week since March, pressured by high yields
By Sumita Layek (Reuters) - Gold fell on Friday, on track to post its worst week since March, as an uptick in U.S.
By Sumita Layek
(Reuters) - Gold fell on Friday, on track to post its worst week since March, as an uptick in U.S. Treasury yields and a logjam over a U.S. stimulus bill to help the coronavirus-hit economy dented the metal's allure.
Spot gold dipped 0.3% to $1,946.56 per ounce by 10:53 am EDT (1453 GMT) and U.S. gold futures fell 0.8% to $1,953.80.
After hitting a record peak of $2,072.50 on Aug. 7 and rising over the previous nine weeks, bullion declined 4.3% this week.
"The gold market had been in a parabolic state, so when you throw a little pickup in yields along with the impasse on the stimulus bill, it was going to see a bit of a retracement," said David Meger, director of metals trading at High Ridge Futures.
"We might have gone a little too far, too fast, and we believe the market is in need of a pause, a consolidation. And that's exactly what we are seeing."
Poor economic data from far and wide, including disappointing U.S. retail sales, also did not help safe-haven gold.
The benchmark U.S. 10-year Treasury yield hovered near seven-week highs, while hopes for a fresh round of U.S. coronavirus relief faded as Congress went into recess.
Higher yields increase the opportunity cost of holding non-yielding assets such as bullion, which has climbed over 28% so far this year.
"We're going to hit the all-time highs again on the likelihood of a substantial stimulus package and the possibility of chaos around the election is going to drive people into a flight to safety," said Jeffrey Sica, founder of Circle Squared Alternative Investments.
Among other metals, silver shed 2.6% to $26.83 per ounce, set to snap a 9-week winning streak, down 5.2% so far.
Platinum fell 0.2% to $955.32 and palladium eased 0.2% at $2,162.39.
(Reporting by Sumita Layek in Bengaluru; Editing by Richard Chang)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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