Futures for gold on Friday headed lower, but the precious metal was holding on to a slight weekly gain, as investors sold bullion at the end of the week amid a rise in U.S. government bond yields and a firming of the dollar.
Yes, yields have risen along with the dollar, which is not great news for the buckdenominated metal, wrote Fawad Razaqzada, market analyst at ThinkMarkets, in a research note.
That said, Razaqzada speculates that signs of a long haul in the economic recovery from the COVID19 pandemic, highlighted by stubbornly high claims for joblessness in America, and the Federal Reserves commitment to maintaining interest rates near 0, are factors that should limit the decline for gold, if not eventually help it to overcome its nearterm softness.
Therefore, I think bond yields will likely struggle to rise further than they already have, and the US dollar could remain under pressure. As a result, buckdenominated gold could be about to pop back higher, he wrote.
The buck, as gauged by the ICE U.S. Dollar Index, was up 0.1 but down 0.5 so far this week, while the yield for the 10year Treasury note was at around 1.18 Friday, holding around its highest level since March.
Against that backdrop. Gold for April delivery was trading off 13,80, or 0.7, at 1,813 an ounce, following a 0.9 slide in the prior session. On Wednesday, prices notched their highest settlement since Feb. 1, FactSet data show.
Meanwhile, March silver was picking up 4 cents, or 0.2, to trade…