Gold steadies, heads for second straight weekly gain

[BENGALURU] Gold prices were muted on Friday (Jan 21) and were on course for a second consecutive weekly gain, as investors turned to safe-haven assets while awaiting signals on interest rate hikes from the US Federal Reserve's meeting next week.

Spot gold was unchanged at US$1,838.21 per ounce as of 12.35 am GMT. US gold futures were down 0.2 per cent at US$1,838.70.

Benchmark US 10-year Treasury yields dropped on Thursday, reducing the opportunity cost of holding non-interest bearing bullion, and buoying gold.

Gold has gained about 1.2 per cent so far this week and is en route to its second weekly gain in three this month - a positive start for bullion in a year that is expected to be difficult.

All eyes are on the US central bank's Federal Open Market Committee scheduled meet on Jan 25-26 for any updates on the Fed's existing plans for rate hikes against the backdrop of surging inflation.

Although gold is usually perceived as an inflationary hedge, it is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-interest bearing bullion.

The number of Americans filing new claims for unemployment benefits jumped to a 3-month high last week.

Japan's core consumer prices rose 0.5 per cent in December from a year earlier.

Spot silver was down 0.4 per cent at US$24.34 an ounce, but is still set for its best week in a year - up about 6 per cent so far.

Palladium fell 0.6 per cent to US$2,047.05, and is poised for a weekly gain of about 9 per cent.

Spot platinum dropped 0.4 per cent to US$1,034.98, but remains on course for its best weekly showing in 7 months, having gained about 6.6 per cent so far.

REUTERS