Gold prices held near one-year highs on Friday as recent US economic data reinforced hopes that the Federal Reserve was close to the end of its rate-hiking cycle, which drove non-yielding bullion towards a second straight weekly rise.
Spot gold was down 0.2% at $2,034.89 per ounce by 1108 GMT, with prices hovering below last session’s high since March 9, 2022. U.S. gold futures fell 0.1% to $2,052.30.
Gold is lower in the session as the opportunity cost of holding bullion is high since bond yields are rising, said Peter Fertig, an analyst with Quantitative Commodity Research.
Euro zone yields were near a month-high as focus shifted to the European Central Bank’s tightening path.
The Fed, meanwhile, considered a rate-hike pause in March in the face of the sudden collapse of two U.S. regional lenders, yet inflationary pressures were seen as more important. The collapse pushed bullion over $2,000.
Gold is considered a hedge against inflation and economic uncertainties, but higher interest rates dim non-yielding bullion’s appeal.
“Gold is placed in a solid positive trend and the first resistance zone is placed at $2,070-$2,075, on the historical high, reached in March 2022,” Carlo Alberto De Casa, external analyst at Kinesis Money, wrote in a note.
Limiting gold’s losses, the dollar slid to a one-year low after data this week showed consumer price index rose less than expected and boosted hopes for a Fed pause.
Investors await U.S. retail sales later in the day and gold could head towards its all-time high, should the data come in soft enough, said Matt Simpson, a senior market analyst at City Index.
Spot silver was up 0.8% at $26.00 per ounce, after rising to a year’s high of $26.07 earlier in the session, and is set for a fifth-weekly gain.
Platinum fell 0.1% to $1,045.95, while palladium was down 0.1% at $1,498.38, both due for weekly rises.