Gold heads for worst week in six on falling rate-cut bets

Shafaq News/ Gold prices slipped on Friday and were on track for their worst week in six, as the dollar and bond yields firmed after U.S. central bankers pushed back against expectations of early interest rate cuts.

Spot gold edged down 0.1% to $2,020.79 per ounce by 0535 GMT, and has fallen 1.4% so far in the week.

Meanwhile, U.S. gold futures edged up 0.1% to $2,022.60.

Bullion was pressured as traders adjusted their rate-cut expectations following better than expected data and hawkish Fed speakers, said Hugo Pascal, a precious metals trader at InProved.

This also offset safe-haven premium from geopolitical risks in the Middle east, Pascal added.

The dollar index (.DXY), opens new tab edged down 0.1% but was up nearly 1% so far this week. A stronger dollar makes greenback-denominated gold more expensive for foreign currency holders.

Yields on the benchmark U.S. 10-year Treasury notes touched a fresh five-week high of 4.1710%.

Atlanta Federal Reserve President Raphael Bostic said he was open to lower rates sooner than anticipated depending on how quickly inflation falls, but the baseline was for cuts to start in the third quarter.

Markets are betting on 139 basis points (bps) of Fed rate cuts this year, down from 150 bps a week earlier, according to LSEG's interest rate probability app IRPR, opens new tab.

The odds of a cut in March have dropped to 55% from about 71% last week, according to IRPR.

Lower interest rates decrease the opportunity cost of holding bullion.

Spot silver fell 0.4% to $22.65 per ounce, platinum was unchanged at $907.12, and palladium edged up 0.1% to $939.53.

(REUTERS)