Futures contracts for gold were under sharp selling pressure Friday as government debt resumed a selloff, pushing yields commensurately higher and placing renewed pressure on bullion. A jump in the U.S. dollar also weighed on precious metals, which were still holding on to modest gains.
For the week, gold is headed for a gain of about 0.2%, while silver is aiming for a climb of about 1%. A weekly rise for gold and silver would snap a three-week skid.
A rise in yields on Friday has been partly to blame for the downturn in metals. The 10-year Treasury note yield
was most recently at around 1.61%, while the dollar, as gauged by the ICE U.S. Dollar Index
was up 0.5%.
“Government bond yields are on the rise again Friday after a very brief respite at midweek, which has given stock market traders pause again,” wrote Jim Wyckoff, senior analyst at Kitco.com.
“Rising bond yields are not yet at the levels that would produce problematic price inflation, but the trajectory of the rising yields is starting to concern some market watchers,” the analysts wrote.
Read More: Gold prices sink, on track to halt a 3-session rise as 10-year yield and dollar resume run-up