Gold gained on Friday as the dollar and bond yields eased, but remained on course for a third straight weekly dip as strong U.S. economic data reinforced bets that the Federal Reserve will keep interest rates elevated.
Spot gold rose 0.3% to $1,894.41 per ounce Friday, after touching its lowest in five months on Thursday. U.S. gold futures rose 0.3% to $1,920.80.
The dollar was down 0.2%, making gold cheaper for holders of other currencies.
Minutes from the most recent U.S. Federal Reserve meeting showed most members continued to see “significant upside risks to inflation.” Traders expect the Fed to hold rates in the 5.25-5.5% range until 2024.
Benchmark 10-year U.S. Treasury yields eased from their highest levels since October, propping up zero-yielding bullion.
UBS cut its year-end target for gold from $2,100/oz to $1,950/oz, highlighting that the next boost in gold prices would require a renewal of ETF demand, expecting gold to remain range-bound until such a time.
However, the Swiss bank forecast central bank gold buying to remain strong for the rest of the year, having picked up in June after three months of net selling.
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