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Gold poised for weekly gain as U.S. bond yields, dollar slip

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Gold was set for a 3rd straight weekly gain on Friday as weaker U.S. bond yields and dollar bolstered its attraction, with buyers focussing on how the Federal Reserve responds to increased inflation and considerations over tepid financial development.

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Spot gold fell 0.1% to $1,797.16 an oz by 0356 GMT, however has gained 0.2% up to now this week. U.S. gold futures dropped 0.3% to $1,797.60.

Benchmark 10-year U.S. Treasury yields had been set for their largest weekly decline in three months, lowering the chance value of holding non-yielding bullion.

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The dollar was headed for a 3rd straight weekly decline, making gold extra engaging to patrons holding different currencies.

Market contributors now await the Fed coverage assembly subsequent week. Data confirmed the U.S. economic system grew on the slowest tempo in additional than a 12 months final quarter, whereas shoppers’ inflation expectations over the subsequent 12 months jumped to a 13-year excessive.

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“The baseline is that the Fed wants to be done tapering by mid-2022, but there’s the risk of a more hawkish Fed if it suggests it could be open to tapering faster, which should strengthen the dollar and weaken gold,” DailyFX foreign money strategist Ilya Spivak mentioned.

Reduced stimulus and rate of interest hikes are likely to push authorities bond yields and the dollar up, denting gold’s attraction.

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“We should see a slow grind lower in gold towards $1,700 and possibly under it into year-end,” Spivak mentioned.

Analysts in a Reuters ballot trimmed their gold worth forecasts for the remainder of this 12 months and subsequent.

In one other ballot, analysts lowered forecasts for palladium and platinum costs this 12 months and the subsequent as a chip scarcity hurts the manufacturing of autos containing the metals.

Platinum rose 0.1% to $1,019.83 per ounce, whereas palladium gained 0.3% to $1,994.64.

Spot silver fell 0.7% to $23.94 per ounce and was set for its worst week since mid-September. (Reporting by Nakul Iyer in Bengaluru; Editing by Subhranshu Sahu)

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