BENGALURU: Gold slipped on Friday as a stronger dollar and rebounding yields dulled its appeal and pushed the metal further off one-month highs reached in the previous session.
Spot gold fell 0.8 percent to $1,815.19 per ounce by 12:18 pm EDT, though it was up 0.5 percent so far this week. US gold futures dropped 0.9 percent to $1,813.30.
Benchmark US 10-year Treasury yields rebounded from one-week lows and the dollar index was bound for a strong weekly gain.
TD Securities commodity strategist Daniel Ghali said gold’s inability to benefit substantially from weaker US real yields suggested that it remains vulnerable to a further pull-back.
“Although gold’s valuation is more attractive on a relative basis to US Treasury inflation protected securities (TIPS), the reason gold is trading at a discount to it is because it does not have the same carry advantage.”
Earlier this week, Federal Reserve Chair Jerome Powell reiterated that the US central bank would remain accommodative, driving gold to a one-month high on Thursday.
Uncertainty around a potential spike in Covid-19 Delta variant cases in the United States could force the Fed to remain accommodative for longer, supporting gold, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
Elsewhere palladium slid 3.6 percent to $2,633.20 an ounce, on route to its first weekly decline in four, while platinum lost 2.9 percent to $1,105.92.
A US retail sales report for June showed purchases of motor vehicles declined because of a lack of supply caused by a global semiconductor shortage.
“The auto shortage will probably linger for a while and perhaps that’s causing palladium and platinum prices to struggle a bit,” ED&F Man Capital Markets analyst Edward Meir said.
The two metals are used by automakers to limit emissions in engine exhaust systems. Silver shed 2.3 percent to $25.73 per ounce.
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