Gold Down but Set to Record Weekly Rise Over Weaker Dollar, Inflation Concerns

Gold was down on Friday morning in Asia as an improving economic outlook broadened investors’ risk appetite. However, a weaker dollar and growing inflationary pressure capped losses and set the yellow metal on track for a third consecutive weekly rise.

Gold futures were down 0.38% to $1,874.75 by 12:03 PM ET (4:03 AM GMT); The dollar, which usually moves inversely to gold, inched down on Friday and was headed towards a weekly loss.

Benchmark 10-year U.S. Treasury yields also fell to 1.6340% during the previous session thanks to disappointing demand for Thursday’s auction of 10-year Treasury Inflation-Protected Securities.

Hopes of a quick economic recovery were further strengthened by strong jobs data out of the U.S. on Thursday. The past week saw 444,000 initial jobless claims filed, the lowest number since March 2020.

In Asia-Pacific, Japanese core consumer prices slid for the ninth consecutive month in April, with a record slump in cellphone fees s offset by rising energy prices. The National Core Consumer Price Index (CPI) contracted 0.1% year-on-year while the National CPI contracted 0.4% month-on-month.

Elsewhere in the region, Australia released retail sales data for April earlier in the day.

Investors also await a slew of U.K. economic data due to be released later in the day, which include April retail sales as well as the composite, manufacturing and services purchasing managers’ indexes for May.

SPDR Gold Trust (P:GLD), the largest gold-backed exchange-traded fund globally, said that its holdings rose 0.6% to 1,037.09 tons on Thursday from 1,031.27 tons the day before.

In other precious metals, palladium gained 0.5% and platinum rose 0.4%, while silver eased 0.1%.