CORRECTED-PRECIOUS-Gold dips on rising yields; faces worst week since March

CORRECTED-PRECIOUS-Gold dips on rising yields; faces worst week since March

Reuters  | Aug 14, 2020 20:30

CORRECTED-PRECIOUS-Gold dips on rising yields; faces worst week since March

(Corrects to read March (not July) in headline, paragraph 1)
* Gold on course for more than 4% weekly fall
* Silver set to snap 9-week winning streak
* Investors await U.S. retail sales data at 1230 GMT
* Interactive graphic tracking global spread of coronavirus:
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By Nakul Iyer
Aug 14 (Reuters) - Gold fell on Friday as a rally in U.S.
treasuries and a steady dollar prompted a sell-off in bullion,
setting it up for its biggest weekly decline since March
following a steep retreat from record peak.
Spot gold XAU= dipped 0.3% to $1,947.67 per ounce by 1159
GMT. U.S. gold futures GCv1 fell 0.7% to $1,956.50 per ounce.
Having hit a record peak of $2,072.50 on Friday and posting
gains in the previous nine weeks in a row, bullion has declined
4.2% so far this week.
"Everybody was eager for gold and the buying became so
intense over the last few weeks that gold became overextended,"
said Robin Bhar, an independent analyst.
"Nothing goes up in a straight line ... (with the) over
exuberance, things needed to correct, so we are now
Gold prices are being pressured as the benchmark U.S.
10-year yield climbed to seven-week highs, analysts said. US/
Higher yields increase the opportunity cost of holding
non-yielding assets such as bullion.
Gold also largely ignored economic data from top consumer
China, which missed market expectations, and data showing the
euro zone's economy recorded its deepest contraction on record
in the second quarter. Markets now await U.S. retail sales figures due at 1230 GMT
for further clues on the economy.
Investors are also keeping a close eye on developments
around fragile China-U.S. relations, ahead of key talks on Aug.
15 and a stalemate in Washington over a new stimulus package.
"It could be the case that before the elections, there would
be no further stimulus," Bank of China International analyst
Xiao Fu said.
"Gold could then be lacking upward impetus that will imply
the shorts or the profit-taking side will be winning momentum,
pushing gold even lower."
In other markets, silver XAG= fell 3.1% to $26.70 per
ounce, set to snap a 9-week winning streak, down 5.3% so far.
Platinum XPT= fell 1.3% to $945.15 and palladium XPD=
was down 0.5% at $2,155.30 per ounce.

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