Stronger Dollar and Yields Weigh on Gold; US employment data awaited.


By Swati Verma

(Reuters) – Gold prices edged lower on Friday, on course for a third straight weekly loss, as the U.S. dollar and Treasury yields rallied following a hawkish stance by the U.S. Federal Reserve , with investors awaiting US employment data to be released later in the day.

Spot gold was down 0.1% at $1,875.66 an ounce, 0307 GMT, while US gold futures were flat at $1,875.40. Bullion is down about 1% so far this week.

The dollar was heading for a fifth winning week against its major peers, as benchmark US Treasury yields resumed their ascent after hitting their highest since November 2018 in the previous session.

Investors now have their eyes on the US Department of Labor’s non-farm payrolls data for April 12:30 GMT to gauge its impact on monetary policy.

“I wouldn’t be surprised to see another earnings print above consensus, and that might not be good for bullion as the market would read those tea leaves as a sign of improving odds of a 75 point hike. basis at the July FOMC meeting,” said Stephen Innes, managing partner at SPI Asset Management.

The Fed on Wednesday raised its benchmark rate by half a percentage point, the highest in 22 years.

The Bank of England also raised interest rates on Thursday, bringing them to their highest level since 2009, by a quarter of a percentage point, to 1%.

Gold, which does not offer a return of its own, tends to fall out of favor with investors when interest rates rise.

Among equities, Asian stocks tumbled as investors worried that rising interest rates could hurt global economic growth.

With the market back in “sell everything” mode, it looks like the “don’t fight the Fed” strategy is back in play,” Innes said.

In other metals, spot silver slid 0.5% to $22.38 an ounce and was on track for a third straight weekly decline.

Platinum slid 2.7% to $953.90 and palladium 0.6% to $2,174.95.



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