On Friday, gold traded in a tight range as the dollar climbed higher on the possibility of aggressive interest rate hikes by the U.S. Federal ReserveFederal Reserve, which partially offset safe-haven demand caused by the heightened Russia-Ukraine conflict.
Spot gold was flat at $1,929. By 0520 GMT, 52 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 relatively well this week, given the move higher by the U.S. yields and the U.S. dollar.
The U.S. dollar went to a near two-year high against a basket of currencies and was poised for its best week in a month, backed by hawkish remarks by 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 Ukraine uncertainty, rapid inflation and the still persistent COVID 19 pandemic, but the Fed's aggressive stance to combat inflation, recovering bond yields, stronger dollar and the easing of restrictions on higher vaccination rates will put a lid on gold prices, Fitch Solutions said in a note on April 7.
Russia gave the most sombre assessment of its invasion of Ukraine, describing the tragedy of mounting troop losses and economic hit from sanctions, as Ukrainians were evacuated from eastern cities before an anticipated major offensive.
Spot silver was flat at $24.57 per ounce.
Platinum was down 0.2% at $961.05 and the palladium rose 1.5% to $2,267. Both metals were set for a fifth consecutive weekly loss.