Gold prices edged down on Friday to near their lowest levels this year, pressured by a firm US dollar amid surging US Treasury yields. Spot gold was down about 0.1 percent at $1,289.35 per ounce at 0657 GMT, after hitting its lowest since Dec. 27 in the previous session at $1,285.41. The metal was heading for its biggest weekly decline since early December.
US gold futures for June delivery were 0.1 percent lower at $1,288.60 per ounce. "The 10-year US yields put the dollar on a firm foot and put pressure on metals and gold," said a Hong Kong-based trader, adding that some "risk-on" sentiment in markets today was also adding pressure. A stronger greenback makes dollar-denominated gold more expensive for users of other currencies, while higher US yields dampen the appeal of non-yielding bullion.
"Failure of the US to reach any trade deal with China, as Trump has already indicated that there may not be a favourable outcome, could stimulate some demand for gold," said Naeem Aslam, chief markets analyst at Think Markets. Spot gold still targets $1,302 per ounce as it has stabilized around a support at $1,287, Reuters technical analyst Wang Tao said.