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.

Reuters August 15, 2020 00:06:13 IST
Gold set for worst week since March, pressured by high yields

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. 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.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.