Tue. Jan 25th, 2022

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Gold prices were holding near a more than one-week high on Friday, supported by a retreating U.S. dollar and lower Treasury yields as markets awaited economic data to gauge the pace of upcoming U.S. rate increases.

Spot gold was steady at $1,821.60 per ounce by 1228 GMT, after earlier reaching a week’s high of $1,828.92. U.S. gold futures were up 0.1% to $1,822.80.

Bullion has risen by about 1.4% so far this week, the most since Nov. 12.

“The fact that the U.S. inflation numbers weren’t as high as people were thinking, might be in gold’s favor,” said Michael Hewson, chief market analyst at CMC Markets UK, adding that a weaker dollar and falling yields for the week have helped push gold higher.

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Non-yielding bullion is considered an inflationary hedge. It also benefits from dollar weakness that makes it cheaper for holders of other currencies.

Federal Reserve policymakers this week signaled they will start raising U.S. interest rates in March to fight inflation.

Investors await U.S. economic data including retail sales later in the day, after the December CPI data came in line with expectations.

The dollar fell to its lowest in more than two months, while the benchmark U.S. 10-year Treasury yields face their first weekly dip in four.

“There is strength in the market but at the same time there is a key level of resistance at $1,830 that gold will struggle to break because it would need further dollar weakness or further easing in the bond markets for that to happen,” said Saxo Bank analyst Ole Hansen.

Spot silver fell 0.1% to $23.05 an ounce and was en route to its best week in two months.

Platinum rose 0.9% to $978.01 and was set to gain this week, while palladium rose 0.2% to $1,891.68, yet was poised for a weekly drop. (Reporting by Seher Dareen and Swati Verma in Bengaluru; editing by Barbara Lewis and David Evans)

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