Gold prices moved higher slightly on Friday, but were on track for their worst week since March 2020 after the U.S. Federal Reserve’s hawkish message on monetary policy bolstered the dollar and bond yields, while denting bullion’s appeal as an inflation hedge.
Spot gold was up 0.3% at $1,779.11 U.S. per ounce, soon after the crack of midnight EDT Friday. However, prices have fallen 5.2% so far this week.
U.S. gold futures edged 0.2% higher to $1,779 per ounce.
The benchmark 10-year yield held firm above 1.50%, increasing the opportunity cost of holding non-interest bearing gold.
Fed officials have begun signaling an exit from the central bank’s extraordinarily easy monetary policy that so far is smoother and indicated to be speedier than when the reins were tightened after the last crisis.
Higher interest rates will dull gold’s appeal as they translate into a higher opportunity cost of holding it.
The White House will reportedly consider arranging talks between U.S. President Joe Biden and his Chinese counterpart, Xi Jinping, as the two countries spar over issues including human rights.
Silver rose 0.7% to $26.12 per ounce, palladium gained 0.7% to $2,513.88, while platinum climbed 1% to $1,068.40.
