Gold Prices to Post Weekly Gain After Two Consecutive Weeks of Losses
Gold prices are holding close to the highest levels seen in over a month touched during trading on Thursday and are all set to post a gain of almost 1.5% for the week, supported by a decline in the US dollar and Treasury yields. At the time of writing, GOLD is trading at a little above $1,749.
The US dollar has turned bearish after strengthening over the past few weeks on account of a dip in US Treasury yields. Additional weakness in the greenback was driven by an unexpected rise in US weekly jobless claims for the second consecutive week, raising concerns about the strain in the labor market.
A decline in bond yields reduces the opportunity cost of holding non-yielding bullion while a weaker dollar makes gold more affordable to purchase for holders of other currencies. Both these factors have supported bullish moves in the yellow metal this week, after two consecutive weeks of bearishness.
Gold prices also received a boost during the mid of this week when the Fed released the minutes of its last policy meeting held in March. The minutes reveal a cautious outlook among the central bank officials and a willingness to extend their dovish approach for a longer time until employment and inflation recover to pre-pandemic levels across the US.
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