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Futures contracts for gold were under sharp selling pressure Friday as government debt resumed a selloff, pushing yields commensurately higher and placing renewed pressure on bullion. A jump in the U.S. dollar also weighed on precious metals, which were still holding on to modest gains.
April gold on Comex GC00, -1.03% GCJ21, -1.03% was down $19.80, or 1.2%, to trade at $1,702.80 an ounce, after gaining less than 0.1% in the previous session.
Meanwhile, May silver SIK21, -1.88% SI00, -1.88% was off 67 cents, or 2.6%, to trade at $25.52 an ounce, following a 0.2% rise on Thursday. Gold has so far posted three straight daily gains.
For the week, gold is headed for a gain of about 0.2%, while silver is aiming for a climb of about 1%. A weekly rise for gold and silver would snap a three-week skid.
A rise in yields on Friday has been partly to blame for the downturn in metals. The 10-year Treasury note yield TMUBMUSD10Y, 1.609% was most recently at around 1.61%, while the dollar, as gauged by the ICE U.S. Dollar Index DXY, +0.43%, was up 0.5%.
“Government bond yields are on the rise again Friday after a very brief respite at midweek, which has given stock market traders pause again,” wrote Jim Wyckoff, senior analyst at Kitco.com.
“Rising bond yields are not yet at the levels that would produce problematic price inflation, but the trajectory of the rising yields is starting to concern some market watchers,” the analysts wrote.
