Gold set for first weekly gain in five as dollar rally eases

Friday,   20-May-2022   07:57 AM (IST)

Gold prices on Friday hovered near a one-week high scaled in the previous session, and were set for their first weekly gain since mid-April, as the U.S. dollar receded from two-decade highs, reviving demand for safe-haven bullion. Spot gold  was flat at $1,841.37 per ounce, as of 0104 GMT, after rising as much as 1.9% in the previous session. U.S. gold futures  edged 0.1% lower to $1,839.30. Gold prices have climbed about 1.7% so far this week. The U.S. dollar slipped across the board, extending its pullback from a two-decade high, as most major currencies battered by the greenback's advance this year drew buyers. A weaker dollar makes bullion cheaper for overseas buyers. U.S. 10-year Treasury yields also fell, lifting demand for zero-yield gold, as continued softness in U.S. economic data fuelled growth concerns amid aggressive monetary tightening by the Federal Reserve. As bullion yields no interest it can become less attractive to investors when short-term U.S. interest rates are hiked. It is, however, seen as a safe store of value during times of economic crises. The U.S. Fed will lift interest rates higher by the end of this year than anticipated just a month ago, keeping alive already-significant risks of a recession, a Reuters poll of economists found. Reflecting an uptick in demand, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.66% to 1,056.18 tonnes on Thursday, following a recent streak of losses. Spot silver fell 0.2% to $21.87 per ounce, but has gained nearly 4% so far this week. Platinum dropped 0.5% to $957.69, while palladium edged up 0.1% to $2,007.98. Both were set for weekly gains of about 2.1% and 3.6%, respectively.