Gold dropped on Friday, February 23, heading towards its biggest weekly decline in 2-1/2 months, as the
dollar climbed further from last week’s three-year low on the back of higher Treasury yields.
Spot gold was down 0.2 percent at $1,329.20 an ounce at 1045 GMT, its fifth session of losses in six. U.S. gold futures were down 0.1 percent at $1,331.20 an ounce.
Spot prices have shed 1.4 percent so far this week, their biggest weekly decline since early December, after failing to sustain a brief push back above $1,360 an ounce last Friday.
“Once again gold failed to break resistance at $1,360/1,370,” ActivTrades analyst Carlo Alberto de Casa said,
adding that gold had staged a small rebound from the first support area of $1,320 on Thursday.
“Gold remains lateral or slightly positive, (and) the main trend will change only below $1,300,” he said, adding that further dollar strength could weigh on gold but it was unlikely to push it below this level.
Volatility has jumped across financial markets this month as investors worried about the pace of U.S. rates hikes in the wake of data showing a pick-up in inflation.
On the physical gold markets, buying was muted in major consumer China after the week-long Lunar New Year holiday, traders said, which closed financial markets until Thursday.
“China’s return to the market following their New Year holidays did little to ignite interest in gold,” MKS said in a note. “Mild buying only (acted) to provide underlying support for prices, rather than see the metal higher.”
Among other precious metals, silver was down 0.3 percent at $16.57 an ounce, palladium was flat at
$1,038.49 and platinum was up 0.1 percent at $994.
