Gold dips as yields rise

Gold was on course to gain for the week as concerns over the war in Ukraine and rising prices boosted its appeal as a safe-haven and an inflation hedge, but prices eased on Friday as U.S. Treasury yields firmed

Spot gold was flat at $1,956.09 per ounce. U.S. gold futures dipped 0.3% to $1,956.24

The metal hovered near a one-week high scaled in the previous session and jumped nearly 2% so far this week

Helped by expectations of monetary tightening by the U.S. Federal Reserve, yields on the U.S. 10-year Treasury note firmed near multi-year highs, increasing the opportunity cost of holding zero-yield bullion

“If interest rates do continue to rise at a quick pace that could limit the upside in precious metals,” said Chris Gaffney, president of world markets at TIAA Bank

“However, overall tone of the market is still supportive of precious metals. There is safe-haven buying and also as an inflation hedge on the retail side. We’re seeing clients coming in wanting to add the diversification of gold to their portfolios,” Gaffney said. GOL/ETF

The Fed raised borrowing costs for the first time in three years last week, while traders are pricing in a probability of a 50 basis points rate hike during the Fed policy meeting in May

Gold, seen as a safe investment during times of political and financial uncertainty, has risen about 1.6% this week as investors try to shield against the impact of the war in Ukraine and higher oil prices that threaten global growth

“Don’t be surprised to see some safe-haven and bargain buying surface as the session progresses and heading into the weekend,” said Jim Wyckoff, senior analyst at Kitco Metals in a note.rsday may push the Federal Reserve to raise interest rates by half a percentage point at its next policy meeting in May

Spot silver fell 0.4% to $25.41 per ounce while platinum fell 1.9% to $1,000.8. Palladium dipped 5.65% to $2,380.56