Gold falls as yields rise, dollar strengthens
* Money on track for the third weekly fall
* Bullion Down 0.7% This Week (Price Updates)
July 23 (Reuters) – Gold fell and was heading for a weekly decline on Friday as a stronger dollar, firmer yields and stock markets reduced its appeal.
Spot gold fell 0.3% to $ 1,800.72 an ounce at 1:43 p.m. EDT (5:43 p.m. GMT). US gold futures were down 0.2% to $ 1,801.80.
Bullion lost 0.7% this week after briefly approaching the month-long peak last week, as fears over the increase in Delta-variant COVID-19 cases eased, prompting investors to exit the safe haven asset as risk appetite returned.
“The gold market is looking for a new fundamental driver and there really isn’t one,” said Jim Wyckoff, senior analyst at Kitco Metals, noting that lower real yields and a surge in prices. COVID-19 cases weren’t enough to drive up prices.
“Technical traders are taking over due to lack of fundamentals and the short term technical position of gold has turned negative, prompting some traders to sell the market,” Wyckoff added.
The heavy pressure on the metal was a stronger dollar index that held up near a 3.5 month peak and firmer benchmark Treasury yields. Higher yields tend to weigh on gold, which earns no interest as this translates into an increased opportunity cost of owning the metal.
The market is now focused on meeting the US Federal Reserve next week after the European Central Bank pledged Thursday to keep interest rates at record highs for some time.
“Gold prices have found good physical market support on the downside, but have struggled to gain ground as speculative positioning remains light,” said Suki Cooper, analyst at Standard Chartered.
Holdings in New York’s SPDR Gold Trust, the largest gold-backed exchange-traded fund (ETF), were at their lowest in more than two months on Thursday.
Silver fell 1.2% to $ 25.16 an ounce and was forecast for a third consecutive weekly decline.
Platinum lost 3% to $ 1,059.76 an ounce and palladium lost 1.7% to $ 2,672.76 an ounce. (Reporting by Nakul Iyer in Bangalore; Editing by Andrea Ricci, Will Dunham and Chris Reese)
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