Gold faces third weekly decline as dollar, Treasury yields firm

GOLD prices edged lower on Friday (May 6) and looked set to fall for a third straight week, weighed down by a robust dollar and rising yields, while investors await the US jobs report to assess its impact on monetary policy.

Spot gold fell 0.4 per cent to US$1,869.26 per ounce, as of 1.37 am GMT, while US gold futures slipped 0.4 per cent to US$1,869.10. Bullion has declined about 1.5 per cent so far this week.

Benchmark 10-year US Treasury yields firmed, while the dollar held near a 20-year high against a basket of currencies, making non-yielding bullion expensive for other currency holders.

New claims for US unemployment benefits increased to a more than 2-month high last week, but remained at a level consistent with tightening labour market conditions and further wage gains that could keep inflation hot for a while.

Investors will focus on US Labor Department’s non-farm payrolls numbers for April due later in the day.

The Fed on Wednesday raised its benchmark rate by half a percentage point, the most in 22 years, but Chairman Jerome Powell explicitly ruled out a 75 bps raise in a coming meeting.

SEE ALSO

Australia: Shares skid 2% in broad-based selling on slowdown worries

Oil edges up on supply jitters as EU plans Russian oil ban

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

The Bank of England sent a stark warning that Britain risks a double-whammy of a recession and inflation above 10 per cent as it raised interest rates on Thursday to their highest since 2009, hiking by quarter of a percentage point to 1 per cent.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.4 per cent on Thursday.

In other metals, spot silver slipped 1.1 per cent to US$22.25 per ounce, platinum declined 2.9 per cent to US$952.67 and palladium fell 0.6 per cent to US$2,174.64. REUTERS