Title: Gold Down, Set for First Weekly Gain Since April Over Growth Concerns

May 20, 2022 12:40AM ET

By: AnalysisWatch

Gold prices slipped in Asia on Friday morning but were on track for their first weekly gain since mid-April 2022, as the dollar fell back from a two-decade high and growing investor concerns about U.S. economic growth prompted them to turn to the safe haven.

Gold futures were down 0.01% at $1,841.05 an ounce by 12:34 AM ET, while the yellow metal was up about 1.5% so far this week.

"Recession fears are now giving way to growth fears in the U.S., and the latter is helping gold," Stephen Innes, managing partner at SPI Asset Management, told Reuters.

However, the U.S. Federal Reserve's aggressive rate hike path and quantitative tightening remain a major detriment to gold, he added.

According to a Reuters poll of economists, the U.S. Federal Reserve will raise interest rates by more by the end of 2022 than expected, extending the significant risks of a recession.

In Asia-Pacific, the People's Bank of China kept the one-year policy rate (LPR) at 3.7%, while cutting the five-year LPR to 4.45% from 4.6% the previous month. The Reserve Bank of New Zealand will also make its monetary policy decisions in the coming week.

It has been an exciting week. "After the sell-off below $1,800 triggered by higher real yields, the door opened for long-term strategic buyers to get in front of a technical downtrend," Innes said.

Amid this rising demand, the SPDR Gold Trust also reported that its holdings rose 0.66% to 1,056.18 tons after recent losses on Thursday.

In other precious metals, silver fell 0.3% to $21.83 per ounce, but has gained about 3.6% in the past week. Platinum fell 0.7% and palladium slipped 0.1% but posted gains of about 1.7% and 2.8%, respectively, last week.