On Friday, gold prices remained stuck in a tight range as the dollar firmed on fears of aggressive interest rate hikes by the U.S. Federal ReserveFederal Reserve, partially offset safe-haven demand fuelled by the lingering Russia-Ukraine conflict.
Spot gold was subdued at $1,929. By 0318 GMT, 48 per ounce was available. U.S. gold futures were down 0.3% at $1,931. According to OANDA senior analyst Jeffrey Halley, Gold has held up fairly well this week, given the move higher by both the U.S. yields and the U.S. dollar.
The U.S. dollar rose to a near two-year high against a basket of currencies and set for its best week in a month, backed by hawkish remarks from several Federal Reserve policy makers who are calling for a faster pace of interest rate increases to curb rapid inflation. A stronger U.S. dollar makes gold less attractive for other currency holders.
The U.S. 10 year Treasury yield touched a three-year high in the previous session, increasing the opportunity cost of holding non-yielding bullion. The US Gold is supported by the Ukraine uncertainty, rapid inflation and the persistent COVID 19 epidemic, but the Fed's aggressive stance to combat inflation, recovering bond yields, stronger dollar and easing of restrictions on higher vaccination rates will lead to a lid on gold prices, Fitch Solutions said in a note on April 7.
Russia gave the most sombre assessment of Ukraine so far, describing the tragedy of troop losses and the economic hit from sanctions, as Ukrainians were evacuated from eastern cities before an anticipated major offensive.
Platinum was down 0.2% at $960.57 and the palladium rose 1.4% to $2,264. Both metals were set for a fifth consecutive weekly loss.