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PRECIOUS-Gold hits 1-week low as U.S. bond yields, dollar climb

Published 13/05/2021, 07:47 pm
© Reuters.
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* U.S. consumer prices post largest gain since 2009

* 10-year Treasury yields climb to over 1-month high

* Focus now on U.S. jobless claims, retail sales data

* Russia's Nornickel resumes full operations at Oktyabrsky mine (Updates prices, adds detail)

By Brijesh Patel

May 13 (Reuters) - Gold touched a one-week low on Thursday, as U.S. Treasury yields rose and the dollar firmed after a bigger-than-expected rise in U.S. consumer prices boosted bets for early interest rate hikes.

Spot gold XAU= was down 0.1% at $1,814.47 per ounce by 1108 GMT, after falling to its lowest since May 6 at $1,811.74 earlier in the session.

U.S. gold futures GCv1 fell 0.5% to $1,814.40.

"The real yields continue to rise and there is speculation in the market that there would be a surprise tightening by the Federal Reserve," said Xiao Fu, head of commodities markets strategy at Bank of China International.

Benchmark U.S. 10-year Treasury yields US10YT=RR jumped to their highest in more than a month, while the dollar index .DXY rose 0.1% versus rivals. US/

Data on Wednesday showing U.S. consumer prices jumped the most in nearly 12 years in April, intensified concerns over rising inflation and possible interest rate hikes. interest rates increase the opportunity cost of holding non-yielding bullion.

However, the Fed has pledged to keep interest rates low until the economy reaches full employment, and inflation hits 2% and is on track to "moderately" exceed that level for some time.

Investor now await the U.S. jobless claims report later in the day and retail sales data on Friday.

"The Fed is probably quite focused on unemployment as a reason for keeping the narrative dovish," Nicholas Frappell, global general manager at ABC Bullion, said.

"Given the Flexible Average Inflation target, there's awareness that the Fed can allow for some inflationary room."

Elsewhere, palladium XPD= fell 1.8% to $2,805.95 per ounce, extending declines after top producer Nornickel said it resumed full operations at one of its two mines hit by flooding this year. XAG= was down 0.8% at $26.81, while platinum XPT= dropped 0.6% to $1,202.81.

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