Gold set for first weekly gain in 5 as dollar rally eases

GOLD prices on Friday (May 20) hovered near a 1-week high scaled in the previous session, and were set for their first weekly gain since mid-April, as the US dollar receded from 2-decade highs, reviving demand for safe-haven bullion.

Spot gold was flat at US$1,841.37 per ounce, as of 1.04 am GMT, after rising as much as 1.9 per cent in the previous session.

US gold futures edged 0.1 per cent lower to US$1,839.30.

Gold prices have climbed about 1.7 per cent so far this week.

The US dollar slipped across the board, extending its pullback from a 2-decade high, as most major currencies battered by the greenback's advance this year drew buyers.

A weaker dollar makes bullion cheaper for overseas buyers.

US 10-year Treasury yields also fell, lifting demand for zero-yield gold, as continued softness in US economic data fuelled growth concerns amid aggressive monetary tightening by the Federal Reserve.

As bullion yields no interest it can become less attractive to investors when short-term US interest rates are hiked. It is, however, seen as a safe store of value during times of economic crises.

The US Fed will lift interest rates higher by the end of this year than anticipated just a month ago, keeping alive already-significant risks of a recession, a Reuters poll of economists found.

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Gold flat as dollar strength counters weaker US bond yields

Reflecting an uptick in demand, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.66 per cent to 1,056.18 tonnes on Thursday, following a recent streak of losses.

Spot silver fell 0.2 per cent to US$21.87 per ounce but has gained nearly 4 per cent so far this week.

Platinum dropped 0.5 per cent to US$957.69, while palladium edged up 0.1 per cent to US$2,007.98. Both were set for weekly gains of about 2.1 per cent and 3.6 per cent, respectively. REUTERS