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PRECIOUS-Gold prices set for first weekly decline in 10

Published 14/08/2020, 01:59 pm
© Reuters.
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* Gold on course for 4% weekly fall

* Gold's longer-term uptrend intact - Standard Chartered (LON:STAN)

* Silver set to snap 9-week winning streak

* U.S. 10-year yields up nearly 15 basis points this week

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser

(Adds comment, updates prices)

By Brijesh Patel

Aug 14 (Reuters) - Gold prices fell on Friday after a jump in U.S. Treasury yields prompted investors to reassess their positions following a steep retreat from a record peak earlier this week and put bullion on course for its first weekly fall since early June.

Spot gold XAU= was down 0.5% at $1,942.95 an ounce by 0726 GMT. Bullion has declined more than 4% so far this week, its biggest weekly percentage fall since early March.

U.S. gold futures GCv1 fell 0.9% to $1,951.90.

"Gold is coming under pressure due an uptick in U.S. yields, which is causing a little bit of sell-off right now," said Edward Meir, an analyst at ED&F Man Capital Markets.

Benchmark U.S. 10-year yields rose, after the U.S. Treasury flooded the market with supply, setting the dollar up to stem its recent slide and potentially eroding gold demand among those holding other currencies. .DXY US/ USD/

Higher yields increase the opportunity cost of holding non-yielding assets such as bullion.

Gold also largely ignored economic data from top consumer China, which missed market expectations and dented equities. MKTS/GLOB

Markets kept a wary eye on a stalemate in Washington over a new stimulus package, with U.S.-China trade talks on Aug. 15 also on the radar.

"The longer-term uptrend is intact, given USD weakness and the scale of stimulus and as we expect interest rates to remain low or negative," Standard Chartered analysts said in a note.

Gold has risen 28% this year, as unprecedented global stimulus to ease the economic blow from the pandemic pushed investors to bullion as a hedge against possible inflation and currency debasement.

"While near-term price action is likely to consolidate through $1,900 - $1,950, hard support sits toward $1,875 -$1,880 to continue the bull trend," MKS PAMP said in a note.

Elsewhere, silver XAG= dropped 4% to $26.46 per ounce, set to snap a 9-week winning streak, down 6.3% so far.

Platinum XPT= fell 1.4% to $944.35 and palladium XPD= was down 1.2% at $2,142.04.

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