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Gold down 0.1% on week, its first decline in three
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Silver sheds over 6% in worst week in seven months
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Dollar gains 0.6%, hits one-month peak
(Updates prices)
By Deep Kaushik Vakil
May 12 (Reuters) - Gold prices fell to a one-week low on
Friday, and are on track for a weekly dip, weighed down by a
stronger dollar and an uptick in U.S. bond yields.
Spot gold was 0.1% lower at $2,014.09 per ounce
by 1:45 p.m. EDT (1745 GMT), after falling as much as 0.7%
earlier in the session.
U.S. gold futures were little changed at $2,019.80.
The dollar rose to one-month peak and is heading for
its biggest weekly gain since September, making bullion less
attractive for buyers holding other currencies. Higher 10-year Treasury yields further dimmed
zero-interest bullion's appeal. However, "the upside is limited for dollar strengthening due
to the debt ceiling issues that we will be going through for the
next couple of weeks, where gold will benefit if that lingers
on," said Bob Haberkorn, senior market strategist at RJO
Futures.
Treasury Secretary Janet Yellen said there was still
uncertainty about exactly when Treasury would run out of cash to
pay U.S. government debts, which could come as early as June 1.
Safe-haven bullion tends to gain during times of economic or
financial uncertainty.
The bullish sentiment in the gold market still stands strong
over expectations of the Fed cutting rates later this year, said
Lukman Otunuga, a senior research analyst at FXTM, adding that
traders have practically priced in a 25-basis-point cut by
September.
Fed Governor Michelle Bowman, however, reiterated the
central bank's stance on raising rates if necessary to fight
still-high inflation.
Spot silver fell 0.9% to $23.95 per ounce, down more
than 6% for its worst week in seven months.
Fawad Razaqzada, market analyst at City Index, attributed
the drop to the dollar rebound and concerns over China's
economic recovery.
Platinum slipped 3.5% to $1,054.93, while
palladium lost 2.5% at $1,511.90.
(Reporting by Deep Vakil and Seher Dareen in Bengaluru; Editing
by Sonia Cheema, Subhranshu Sahu, Shailesh Kuber and Shilpi
Majumdar)
