Gold heads for small weekly rise as dollar weakens

GOLD was little changed on Friday (Mar 27), but the metal was on track for a second weekly gain following a retreat in the US dollar from 20-year highs.

Spot gold held its ground at US$1,848.59 per ounce, as of 1.02 am GMT. US gold futures were little changed at US$1,846.70. For the week so far, bullion is up 0.2 per cent.

Gold prices slipped on Thursday as the US Federal Reserve's aggressive monetary policy tightening plan dimmed the metal's appeal, with additional pressure from a rebound inequities.

Minutes of the Fed's May 3-4 policy meeting released on Wednesday highlighted, as the market expected, that most participants favouring additional 50 basis point rate hikes at the June and July meetings.

Higher short-term US interest rates and bond yields raise the opportunity cost of holding bullion, which yields nothing.

The dollar index steadied after a drop in the previous session and was set for a second straight weekly decline, making bullion less expensive for buyers holding other currencies.

US Treasury yields were subdued after the benchmark 10-year note hit a fresh 6-week low, with inflation fears continuing to dissipate as economic data and corporate announcements point to slower growth.

Spot silver dipped 0.2 per cent to US$21.95 per ounce and has gained about 0.9 per cent so far this week.

Platinum was nearly flat at US$950.28 and has slipped 0.5 per cent this week.

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Palladium dipped 0.2 per cent to US$2,006.47 and was set for a weekly gain of about 2.2 per cent, its most since early April. REUTERS