Gold braces for biggest weekly decline in five
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GOLD prices held near two-week lows on Friday (Jul 28) after strong US economic data spurred the dollar and bond yields in a high interest rate environment that dragged the non-interest bearing metal towards its biggest weekly decline in five.
Spot gold was up 0.2 per cent at US$1,948.24 per ounce by 0126 GMT, after earlier hitting its lowest level since Jul 12 and ending 1.4 per cent lower in the last session. It has declined 0.5 per cent so far in the week, heading for its biggest weekly fall since Jun 23.
US gold futures rose 0.1 per cent to US$1,947.30 per ounce.
The US dollar index and benchmark 10-year Treasury yields were underpinned after data showed the US economy grew faster than expected in the second quarter, potentially keeping a much-feared recession at bay and increasing the likelihood that the Fed could further hike interest rates.
Higher US interest rates and Treasury bond yields raise the opportunity cost of holding gold.
Top central banks continued with another round of rate hikes this week despite cooling inflation, but have now switched in unison to a more cautious posture about further moves in a sign that a year-long round of global monetary tightening could be at an end.
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The Fed and the European Central Bank delivered quarter-percentage-point rate increases this week, as expected, while the Bank of Japan is set to keep ultra-low interest rates on Friday but may make minor tweaks to extend the lifespan of its yield control policy.
Analysts slightly lowered their gold price forecasts for this year, a Reuters poll showed. Global economic concerns also drove down platinum and palladium forecasts for 2024.
Other precious metals were set for weekly declines as well. Spot silver steadied at US$24.14, platinum held at US$936.33, and palladium rose 0.1 per cent to US$1,241.28. REUTERS
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