Spot gold was down 0.6% at $4,515.83 an ounce by 1:00 pm EDT (1700 GMT), having fallen 1% earlier in the session. It was down 0.4% for the week. US gold futures for June delivery fell 0.4% to settle at $4,523.20.
“Market participants are like rabbits in the headlights, fixated on Hormuz and by association, disrupting supply chains across the board, which in turn leads to fears of inflation and concerns about potential interest rate hikes,” said StoneX analyst Rona O’Connell, Houz s’Ping Oil’s channel.
Oil prices rose as investors doubted that the US-Iran peace talks would achieve any breakthrough. (O/R)
Benchmark US 10-year Treasury yields pared earlier losses near more than one-year highs, dampening demand for the non-yielding yellow metal. (US/)
Rising energy costs fuel inflation and could encourage central banks to keep interest rates higher for longer, undermining demand for non-yielding bullion despite being hedged against inflation.
According to CME Group’s FedWatch tool, there is a 58% chance of at least a 25 basis-point increase in US Federal Reserve interest rates by December. (Feedwatch)
Fed Governor Christopher Waller, who until recently advocated low rates, said the central bank should ax “ease bias” and effectively open the door to a potential rate hike.
Elsewhere, the US Consumer sentiment hit a record low in May as rising gasoline prices fueled concerns about deteriorating affordability, a survey showed on Friday.
Spot silver fell 1.1% to $75.85 an ounce, platinum fell 2.5% to $1,916.62 and palladium fell 2.1% to $1,349.30. All metals were on course for weekly losses.
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