Gold faces third weekly decline as dollar, Treasury yields firm

Gold faces third weekly decline as dollar, Treasury yields firm
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BENGALURU (May 6): Gold prices edged lower on Friday (May 6) and looked set to fall for a third straight week, weighed down by a robust dollar and rising yields, while investors awaited the US jobs report to assess its impact on monetary policy.

Spot gold fell 0.4% to US$1,869.26 (about RM8,173.34) per ounce as of 0137 GMT, while US gold futures slipped 0.4% to US$1,869.10. Bullion has declined about 1.5% so far this week.

Benchmark 10-year US Treasury yields firmed, while the dollar held near a 20-year high against a basket of currencies, making non-yielding bullion expensive for other currency holders.

New claims for US unemployment benefits increased to a more than two-month high last week, but remained at a level consistent with tightening labour market conditions and further wage gains that could keep inflation hot for a while.

Investors will focus on the US Labor Department's non-farm payroll numbers for April due later in the day.

The US Federal Reserve on Wednesday raised its benchmark rate by half a percentage point, the most in 22 years, but chairman Jerome Powell explicitly ruled out a 75-basis-point raise in a coming meeting. 

The Bank of England sent a stark warning that Britain risks a double-whammy of a recession and inflation above 10% as it raised interest rates on Thursday to their highest since 2009, hiking by quarter of a percentage point to 1%.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.4% on Thursday.

In other metals, spot silver slipped 1.1% to US$22.25 per ounce, platinum declined 2.9% to US$952.67 and palladium fell 0.6% to US$2,174.64.