Gold prices edged lower Friday, but were on track for a slight gain for the week, with analysts saying slipping U.S. interest rates should help put a floor under the precious metal.
Gold for June delivery was last down $2.80, or 0.2%, to $1290.80 U.S. an ounce, staying below the closely watched level of $1,300 U.S. and on pace for an advance of 0.3% for the week.
Meanwhile, July silver was last down 15 cents, or 0.8%, to $19.30 U.S. an ounce. It’s on track for a weekly gain of 1.1%, buoyed by news earlier in the week that physical demand for the metal rose to a record last year.
Analysts at Commerzbank Commodity Research said in a note Friday that "real interest rates in the U.S., which are below 0.5% for the first time since last July and keep the costs of holding gold low, should preclude any more pronounced fall in the gold price."
Higher bond yields can reduce the allure of gold, since both are seen as safe-havens but gold offers no regular income payments.
In U.S. economic news on Friday, a report on housing starts said they surged in April to hit the fastest pace in five months, rising 13.2% to 1.07 million and topping forecasts.
In other metals trading, July platinum fell $2.60, or 0.2%, to $1,467.30 U.S. an ounce, while June palladium gained $2.70, or 0.3%, to $814.80 U.S. n ounce. High-grade copper for July delivery tacked on one cent, or 0.2%, to $3.15 U.S. a pound.
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