LONDON
Gold ticked lower on Friday as a stronger US dollar and higher yields weighed on the market.
“Both nominal and real rates have been ticking higher and that’s been putting gold under pressure,” said UBS precious metals strategist Joni Teves. “But we think gold should be supported overall so we do see value around these levels.”
UBS has a three-month price target of $1,300.
Gold has shed about 6 per cent since touching a seven-month peak of $1,295.97 on June 6.
Spot gold edged down 0.3 per cent to $1,221.06 per ounce by 1036 GMT. It has dropped 1.6 per cent this week and is set for its biggest weekly fall since the week of May 5.
US gold futures for August delivery fell 0.2 per cent to $1,220.90 per ounce.
The dollar hit a seven-week high against the yen after the Bank of Japan increased its purchases of government bonds, expanding monetary policy at a time when other major central banks are moving towards tightening.
US Treasury yields rose on Thursday, with benchmark yields touching nearly eight-week highs.
Dollar-denominated bullion typically loses value when the greenback and US Treasury bond rates rise since the metal does not bear interest.
The dollar could get a further boost from US non-farm payrolls data at 1230 GMT which is expected to show an increase of 179,000 jobs last month, which would be a sign of labour market strength that could keep the Federal Reserve on course for a third interest rate rise this year.
“We are somewhat concerned about gold’s ability to hold up and see more weakness that could set in, especially if Friday’s payroll number sets off another spike in US yields,” INTL FCStone analyst Edward Meir said in a note.
Silver fell 1.2 per cent to $15.81 per ounce.
Earlier in the session, silver touched $14.86 an ounce, its lowest in 15 months, which appeared to have been driven by an accidental order, according to traders. It is down 4.2 per cent on the week.
Palladium fell 0.1 per cent to $833.50 per ounce after hitting its lowest since June 2 earlier in the session.
Platinum dropped 1.1 per cent to $899.60 per ounce. It is down about 2 per cent so far this week.
