US MIDDAY: gold moves higher

Gold edged higher on Friday after the dollar and US Treasury yields backed off highs, but the prospect of a Korean denuclearisation deal eroded bullion's safe-haven appeal. Spot gold gained 0.4 percent at $1,321.81 per ounce by 1:37 p.m. EDT (1737 GMT). US gold futures for June delivery settled up $5.50, or 0.42 percent, at $1,323.40 per ounce.
"The combination of the dollar retreating and the US Treasury yields retreating below 3 percent is giving gold a boost," said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals. US 10-year Treasury yields, the benchmark of global interest rates, retreated further from the 3 percent level they initially hit on Wednesday.
A rise in US bond yields typically pressures gold by reducing the attractiveness of non-yielding bullion, which is priced in dollars. However the softer US Treasury yields and dollar, and gold dropping to a key support level sparked buying, said Bart Melek, head of commodity strategy at TD Securities in Toronto. "We bounced off the technical level 100-day moving average, which was $1,320 and we just moved above it, primary because the rates in the US moderated a little bit."
Gold was on track to finish the week nearly 1 percent down for its second consecutive weekly decline and the biggest weekly drop in four. The leaders of South and North Korea embraced after pledging on Friday to work for the "complete denuclearisation of the Korean peninsula".
"We have the pictures from the meeting of the two Korean leaders today, showing geopolitical hotspots have calmed down massively, so there's scant argument to be bullish on gold at the moment," said Carsten Fritsch, commodity analyst at Commerzbank in Frankfurt. Silver dropped 0.2 percent at $16.45 an ounce. It is down more than 3 percent this week, the biggest weekly drop since the week ending Feb. 2.
Platinum was down 0.9 percent at $913.90 an ounce after touching $900.50, its weakest since Dec. 18. It was headed for a nearly 1 percent weekly decline. Palladium lost 1.5 percent at $970.22 an ounce, poised for a nearly 6 percent weekly drop. It had rallied nearly 10 percent since US sanctions were imposed on Russian entities on April 6. Russia is the world's biggest producer of palladium.