Gold firms as dollar rally pauses, geopolitical tensions simmer

Gold firms as dollar rally pauses, geopolitical tensions simmer

The weaker-than-expected April consumer price data on Thursday helped to knock the dollar from 2018 highs and push United States bond yields down.

The dollar held firm on Thursday after the 10-year USA bond yield rose back to the psychologically important 3 percent mark and investors looked to US consumer price (CPI) data due later to show a acceleration in inflation. They have fallen more than 100,000 tonnes since March 27.

Gold prices fell in Asian trade on Friday as the dollar firmed slightly, with investors mostly brushing off a potential broadening of conflict in West Asia.

24k gold can be bought at Dh149.75 and the price of 22k is Dh149.75. 10-year US Treasuries are now yielding 2.994%.

The U.S. stock market posted losses on Tuesday, curbing the fall of gold.

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"It's also likely to dent Chinese and especially Indian consumer buying near-term, leaving money managers as the only growing source of private demand", said Ash. But while markets, particularly Oil, are seeing prices shake at the prospect, Gold is shaping up as a strong bet.

USA consumer prices data due at 1230 GMT is expected to show that annual core CPI inflation rose to its highest in more than a year in April, strengthening the case for the Federal Reserve to raise interest rates. As a driver of higher interest rates, inflation signs can drag on the nonyielding metal as investors look for alternative assets.

For now, Ilya Spivak, commodities and currency analyst with Daily FX, said "gold prices are attempting to carve out a bottom after testing rising trend support set from December 2016". July platinum also added less than 0.1% to $925.90 an ounce, holding on to a weekly rise of 1.7%, while June palladium lost 0.9% to $985.20 an ounce, up about 2.9% for the week.

Among other precious metals, silver rose 0.1 per cent to $16.70 an ounce, having hit its highest in more than two weeks at $16.75 in the previous session.

Elsewhere, North American gold-backed exchange-traded funds registered inflows in April at their highest level since September 2017, with safe-haven purchases ushered in by a trade stand-off between the United States and China, Syria tensions and worries about possible USA sanctions on Russian Federation. All three ETFs were ready to end the week higher.