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Gold futures made modest moves in Friday trading and are on track for a weekly loss on the back of strength in U.S. Treasury yields, but poised to post a gain for the month.
Gold had “a challenging week and has been seeking direction given a number of conflicting factors, which include inflation, the U.S. dollar and U.S. GDP”, Jeff Wright, chief investment officer at Wolfpack Capital, told MarketWatch.
While stuck in a trading range, the precious metal has “continued to be challenged in finding traction when fundamentals show it should be appreciating more,” he said, adding that the Biden administration’s spending proposals “should be more of a boost for gold.”
Wright said he’s still focused on the U.S. dollar, inflation and other signs of recovery going into May and that gold will be “range bound at best” from $1,700 to $1,800 in the near term, “with a lack of safe-haven interest even when tensions have risen related to events around the globe.”
Gold for June delivery
GCM21,
was down 80 cents, or less than 0.1%, at $1,767.50 an ounce. July silver
SIN21,
was off nearly 7 cents, or 0.3%, at $26.02 an ounce.
Based on the most-active contracts, gold was off 0.6% for the week, but on track for a monthly rise of about 3%, while silver was down around 0.4% for the week, trading up nearly 6% for the month.
The yield on the 10-year Treasury note
TMUBMUSD10Y,
was at 1.634% in Friday dealings, down for the week, but up for the month. Rising yields can be a headwind for gold because they raise the opportunity cost of holding nonyielding assets.
Gold remains “influenced by U.S. Treasury yields, the dollar’s performance, reflation trade, and global risk sentiment,” said Lukman Otunuga, senior research analyst at FXTM.
“Given the conflicting forces pulling and tugging at the precious metal, the next few weeks could be wild and rocky,” he warned. In the short term, “gold is likely to remain choppy on the daily charts until a fresh directional catalyst is brought into the picture.”
In other Comex metals trading, July copper
HGN21,
shed 0.4% to $4.47 a pound, trading more than 11% higher for the month.
July platinum
PLN21,
added 0.7% to $1,206.40 an ounce, poised for a monthly rise of over 1%, while June palladium
PAM21,
tacked on 0.8% to $2,972.50 an ounce, poised to tally another record high finish and looking at a monthly rise of more than 13%.
