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Futures for gold on Friday were heading slightly lower, with the precious metal pacing its sharpest weekly decline since early January, highlighting a bearish reset for the price of bullion that had seen gains amid the COVID pandemic.
The precious metal has been on the backfoot amid a rise in global bond yields, highlighted by gains in the 10-year Treasury note TMUBMUSD10Y, 1.322%, which was on track for its sharpest weekly rate rise in about six weeks.
Hope for better economic times in the coming months and some success around COVID vaccines has undercut some of the enthusiasm for bullion, analysts said. The rise in yields also has helped to draw demand away from precious commodities, which don’t bear a coupon, compared against interest-bearing, debt that is perceived as risk-free.
“Gold also took a knock from the global jump in yields as the non-yielding bullion becomes less attractive when safe-haven bonds generate higher returns,” wrote Raffi Boyadjian, senior investment analyst at XM, in a daily note.
Prices for the yellow metal for April delivery GC00, -0.15% GCJ21, -0.15% were off $6, or 0.3%, to trade at $1,769 an ounce, after climbing 0.1% on Thursday and snapping a four-session skid. On Wednesday, however, gold marked its lowest settlement since around June, based on the most-active contract.
Meanwhile, March delivery SI00, +1.30% SIH21, +1.30% was adding 26 cents, or 1%, to trade around $27.34 an ounce, recovering most of its drop from the prior session.
For the week, gold is headed for a 2.9% fall, which would represent its sharpest weekly slump since the 3.2% drop for the period ended Jan. 8, FactSet data show.
Silver was headed for a weekly gain of about 0.2%, perhaps benefiting from the metal’s dual role as a precious and industrial commodity that performs better when the economic outlook improves.
