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PRECIOUS-Gold firms on dollar retreat; set for best week in seven

Published 13/03/2021, 02:25 am
© Reuters.
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* Benchmark U.S. Treasury yields hit over 1-year high

* Gold up 1.4% so far this week

* Silver on track for first weekly gain in four

* Platinum set to post biggest weekly gain in four weeks (Recasts, adds comments, updates prices)

By Brijesh Patel

March 12 (Reuters) - Gold prices edged higher on Friday and were on course for their best week in seven, as a slight pullback in the dollar and weakness in equity markets offset pressure from rising U.S. Treasury yields.

Spot gold XAU= was up 0.2% at $1,724.16 per ounce at 02:10 p.m. ET (1910 GMT), after falling as much as 1.4% earlier in the session. Gold is up 1.4% so far this week.

U.S. gold futures GCv1 settled down 0.2% at $1,719.80.

"We've seen a bit of weakness in the U.S. dollar (index), it slumped from around 92 to now just over 91.6," said Bart Melek, head of commodity strategies at TD Securities.

"There's a little bit of risk off sentiment and I suspect the psychological level of $1,700 where people weren't really prepared to go under generated a bit of a rebound in the gold market." MKTS/GLOB

Benchmark U.S. Treasury yields US10YT=RR rose as high as 1.642%, a more than one-year peak. Meanwhile, the dollar index .DXY pared gains, making gold less expensive for other currency holders. US/ USD/

Some investors view gold as a hedge against higher inflation that could follow stimulus measures, but higher Treasury yields dull some of the appeal of the non-yielding commodity.

President Joe Biden on Thursday signed his $1.9 trillion stimulus bill into law and said he was working to move the United States closer to normality by July 4. physical demand providing something of a floor, we doubt that the gold price will fall below $1,600 per ounce this year," Capital Economics analysts said in a note. GOL/AS

"Given our forecast for industrial metals prices to fall later this year, we wouldn't be surprised if the price of silver fell relative to the price of gold."

Silver XAG= fell 0.9% to $25.85 an ounce, but was on track for its first weekly gain in four weeks. Palladium XPD= rose 0.9% to $2,366.35. Platinum XPT= gained 0.5% to $1,200.41 an ounce and was up 6.3% for the week.

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