Gold poised for best week since early May as dollar, yields ease

Oct 15, 2021

[BENGALURU] Gold was set on Friday for its best week in more than 5 months as a retreat in the US dollar and Treasury yields lifted the metal's appeal despite a looming Federal Reserve taper.

Spot gold held steady at US$1,794.09 per ounce by 1.15 am GMT but was up 2.1 per cent for the week so far. On Thursday, prices hit a 1-month high of US$1,800.12.

US gold futures inched down 0.1 per cent to US$1,795.50.

Both the dollar index and benchmark US 10-year Treasury yields pulled back from their multi-month highs.

Despite a broadly shared view that the US labour market has healed enough to allow the Fed to start reducing its monthly bond purchases as soon as next month, policymakers are sharply divided over inflation and what they should do about it.

The International Monetary Fund's steering committee on Thursday urged global policymakers to monitor pricing dynamics closely, but to "look through" inflationary pressures that are transitory and will fade as economies normalise.

The number of Americans filing new claims for unemployment benefits dropped below 300,000 last week for the first time in 19 months.

The Labor Department said its producer price index for final demand rose 0.5 per cent in September, the smallest gain in 9 months.

Miner Barrick Gold on Thursday reported a nearly 5 per cent rise in third-quarter gold production from the previous 3 months, as output jumped at its Veladero mine in Argentina.

Spot silver fell 0.4 per cent to US$23.45 per ounce but was headed for its biggest weekly gain in 7.

Platinum eased 0.1 per cent to US$1,054.09, having hit a peak since Aug 2 at US$1,062.50 on Thursday.

Palladium rose 0.2 per cent to US$2,132.21.