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Title: Gold Up, but Set for First Weekly Loss in Three Over Strong U.S. Yields

Apr 22, 2022 12:33AM ET

By: AnalysisWatch

Gold prices rose in Asia on Friday morning, but rising US government bond yields put gold on course for its first weekly loss in three weeks.

Gold futures were up 0.26% at $1,953.30 an ounce by 12:26 AM ET.

The outlook for gold is muted as rising interest rates obviously weigh, but until we break the trading range of $1,930 to below $2,000 in convincing fashion ... we really don't have much of a direction for gold, Tiger Brokers, Australia Chief Strategy Officer Michael McCarthy told Reuters.

US 10-year government bond yields also continued their upward trend as the Federal Reserve announced tighter policy. This led to bets that the central bank will aggressively raise interest rates to curb inflation.

A stronger US dollar could also put pressure on gold, while on the other hand geopolitical uncertainty remains a support and the gold price is stuck in the middle of these two opposing currents, McCarthy said. The dollar, which usually moves inversely to the gold price, weakened slightly on Wednesday.

The gold price is down about 1.3% so far this week. On safe-haven demand and rising inflation concerns, the yellow metal almost crossed the $2,000 mark on Monday, but then fell back to hit a two-week low in the last session.

With stagflation no longer just a potential risk but becoming a reality, investors around the world are turning to gold to diversify their portfolios, Stephen Innes, managing partner at SPI Asset Management, said in a note.

In other precious metals, silver and platinum fell 0.6 percent and 0.2 percent, respectively, both on hopes of a weekly decline. Palladium, on the other hand, rose 0.4 %.

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