Gold prices rise on Friday, but fall for 3rd straight week on Fed rate hike prospects

Gold prices were higher on Friday but looked set for a third straight weekly loss as the U.S. dollar and Treasury yields rallied on a hawkish U.S. Federal Reserve stance

Spot gold rose 0.2% to $1,880.86 per ounce but was still down about 0.8% for the 1-week period. U.S. gold futures climbed 0.3% to $1,882

The dollar was headed for a fifth winning week as benchmark U.S. Treasury yields held near their highest levels since November 2018

There are several opposing catalysts at play for gold in the likes of a tight monetary outlook driving bond yields and a stronger dollar, and that is being pitted against stagflation risks boosting its safe-haven status and appeal as an inflation hedge, according to Yeap Jun Rong, a market strategist at IG

“With that, gold prices seem to be undergoing a period of indecision until one of the driving forces take greater control of prices

Investors on Friday reviewed U.S. non-farm payrolls, which grew by 428,000 in April, according to the Bureau of Labor Statistics. The figure was more than the Dow Jones estimate of 400,000

Fed on Wednesday raised its benchmark rate by half a percentage point, the most in 22 years

“I would not be surprised to see another above-consensus wage print, and this may not be good for bullion as the market would read those tea leaves as a sign of improving the odds for a 75 bp point hike at the July FOMC meeting,” said Stephen Innes, managing partner at SPI Asset Management

Non-yielding gold tends to fall out of favor among investors when interest rates rise

Equities tumbled as investors expressed concerns that rising interest rates could hurt global economic growth

With the market back into selling everything mode, it seems like “don’t fight the Fed is back in play,” Innes said