PRECIOUS-Gold rebounds as dollar, U.S. bond yields drift lower

  • Reuters
  • Commodities News
PRECIOUS-Gold rebounds as dollar, U.S. bond yields drift lower
Credit: © Reuters.

* U.S. bond yields ease off near 14-month highs

* Gold upside looks limited amid rising yields, risk assets -ANZ

* Palladium up about 12% for week, biggest rise since early Nov. 2020 (Adds analyst comment, details, updates prices)

By Asha Sistla

March 19 (Reuters) - Gold prices bounced back on Friday as the dollar turned negative and U.S. 10-year Treasury yields slipped from their highest in over a year, setting bullion on track for a second straight weekly rise.

Spot gold XAU= gained 0.4% to $1,742.80 per ounce by 0843 GMT, after falling as much as 0.5% earlier in the session. U.S. gold futures GCv1 were up 0.6% at $1,742.30.

"The yields have retraced back and that's why gold is moving up. The U.S. and European 10-year benchmarks have cooled off so...that has led to buying interest in gold," said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.

Despite the jump in gold prices on Friday, the outlook for the safe-haven metal remained bearish as economies gradually recover from the pandemic-induced slump.

"To see gold back above $1,800, we would need to see a major corporate black swan event (Lehman Brothers) and/or reversal of demand for dollar and/or another large stimulus package being proposed in the U.S.," said Michael Langford, director at corporate advisory AirGuide.

The U.S. Federal Reserve this week pledged to press on with aggressive monetary stimulus and projected the strongest U.S economic growth in nearly 40 years, sending U.S. 10-year yields to near 14-month highs on Thursday. US/

"Gold's upside looks limited by rising yields and buoyant risky assets... Talks around tapering asset purchases will be the key headwind later this year," ANZ analysts said in a note.

Palladium XPD= fell 0.5% to $2,667.85, after rising as much as 7.3% in the previous session on a cut in output estimates by top producer Russia's Nornickel Nickel GMKN.MM fuelled supply concerns. supply and the revival of the auto sector still bode well for Platinum Group Metals prices," ANZ said.

The auto-catalyst metal was on track for a near 12% weekly jump, the biggest since early November 2020.

Silver XAG= was up 0.4% to $26.15 an ounce and platinum XPT= was flat at $1,206.67.

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