May 28, 2021
Gold eases on firmer dollar, bond yields ahead of U.S. inflation data
(Reuters) - Gold prices slipped on Friday as the dollar and U.S. Treasury yields firmed, while investors awaited U.S. personal consumption data later in the day to gauge inflationary pressure.
Spot gold fell 0.2% to $1,891.45 per ounce . Bullion has risen 0.6% this week, on track for its fourth straight weekly gain.
U.S. gold futures shed 0.3% to $1,891.60.
“Gold has been a little bit on the defensive side. Technically it was very overbought, and on the fundamental side, the dollar had a big move up yesterday and that started to impact gold,” ED&F Man Capital Markets analyst Edward Meir said.
“Gold is likely to consolidate around this $1,900 mark for a little while longer. Maybe with the next set of numbers that are more inflationary we could start another move up.”
The dollar index was up 0.1%, while the U.S. 10-year Treasury yield rose to 1.617%, translating into higher opportunity cost for holding non-yielding bullion.
Meanwhile, the New York Times reported on Thursday that U.S. President Joe Biden will seek $6 trillion in federal spending for the 2022 fiscal year, a day before the White House is expected to unveil its budget proposal.
Also on investors’ radar is the U.S. personal consumption report due later in the day.
“It’s likely that even if inflation is higher than expected, the central bankers are going to be still dovish,” Avtar Sandu, senior commodities manager at Phillip Futures, said in a note.
“What really matters for gold are real rates and central bankers would continue to keep the rates low, which would be bullish for gold.”
Spot gold may test a resistance at $1,911, Reuters technical analyst Wang Tao said.
Silver fell 0.8% to $27.64 per ounce, and platinum eased 0.3% to $1,175.44.
Palladium rose 0.3% to $2,814.36, with prices getting a fillip after Russia’s Nornickel projected a wider deficit in 2021.