Gold flat as Treasury yields counter soft dollar ahead of key US data

Gold prices were broadly flat on Friday, as higher U.S. Treasury yields offset support from a weaker dollar, while investors awaited key inflation data for signals on the Federal Reserve’s policy path ahead of its meeting next week.

Spot gold held its ground at $4,215.92 per ounce, as of 0524 GMT, and was on track for a 0.3 per cent weekly decline.

U.S. gold futures for December delivery edged 0.1 per cent higher to $4,245.70 per ounce.

Benchmark 10-year U.S. Treasury yields hovered near their highest levels in more than two weeks.

The dollar languished not far from a five-week low against its major peers, making greenback-priced gold more attractive to overseas buyers.

“So the market is waiting for fresh triggers which can come in the form of what the Fed is going to do and (gold) is just consolidating after a brief run in the month of November, but the trend going forward looks to be on the upside,” said Kunal Shah, head of research, Nirmal Bang Commodities.

Shah added that higher Treasury yields were also playing their part in pressuring gold prices.

U.S. data on Thursday showed jobless claims fell to 191,000 last week, the lowest in more than three years and well under the 220,000 forecast. ADP figures revealed on Wednesday that private payrolls fell by 32,000 in November, the sharpest drop in more than 2-1/2 years.

A majority of more than 100 economists polled by Reuters forecast the Fed will reduce its key interest rate by 25 basis points at its December 9-10 meeting, as the central bank seeks to support a cooling labor market.

Lower interest rates tend to favour non-yielding assets such as gold.

Investors are waiting on the delayed September Personal Consumption Expenditures (PCE) Index, the Fed’s preferred inflation gauge, due at 1500 GMT.

Silver rose 1 per cent to $57.68 per ounce and was on track for a weekly gain. The contract climbed to a record high of $58.98 on Wednesday.

Platinum edged 0.1 per cent lower to $1,644.04 and was also set for a weekly loss, while palladium gained 1.1 per cent to $1,464.70 but was poised to end the week higher.