Gold traded in a narrow range on Friday as the dollar rose on prospects of a aggressive interest rate hike by the US Federal Reserve, partially offsetting the safe-haven demand fueled by the escalating Russian-Ukrainian conflict.
Spot gold settled at $1,929.52 an ounce by 0520 GMT. US gold futures were down 0.3% at $1,931.90.
“Gold has held up relatively well this week given the higher movement by both US yields and the US dollar, and we could see some inflation hedge buying and the primary haven supporting the downside,” said OANDA chief analyst Jeffrey Haley.
The US dollar rose to a nearly two-year high against a basket of currencies and braced for its best week in a month, buoyed by hawkish comments from several Fed policy makers calling for an acceleration of interest rate increases for a quick rein in. economic inflation. [USD/]
A strong US dollar makes gold less attractive to other currency holders.
The benchmark 10-year US Treasury yield touched a three-year high in the previous session, increasing the opportunity cost of holding non-yielding bullion. [US/]
However, gold is supported by uncertainty in Ukraine, rapid inflation, and the ongoing COVID-19 pandemic, but the aggressive stance of the Federal Reserve to fight inflation, restore bond yields, strengthen the dollar, and ease epidemic restrictions on high vaccination rates will put In a note dated April 7, the gold price cap.
Russia gave its most grim assessment yet of its invasion of Ukraine, calling a “tragedy” of mounting troop losses and the economic blow of sanctions, as Ukrainians were evacuated from eastern cities ahead of a major offensive expected.
Spot silver was flat at $24.57 an ounce.
Platinum fell 0.2 percent to $961.05, and palladium rose 1.5 percent to $2267.55. Both metals are set for their fifth consecutive weekly loss.
(Reporting by Asha Cestla in Bengaluru; Editing by Sherry Jacob Phillips)
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