PRECIOUS-Gold heads for fourth weekly gain as Fed’s Powell sticks to conciliatory tone
* Platinum up 2.6% over the week
* Palladium prices expected to decline in 2022 – UBS
* Palladium on track for first out of four weekly drop (add comments and update prices)
July 16 (Reuters) – Gold prices eased on Friday but remained on track for a fourth straight week of gains, helped by assurances from the US Federal Reserve to keep monetary policy accommodative for the recovery economic.
Spot gold fell 0.3% to $ 1,823.66 an ounce at 07:25 GMT, after hitting $ 1,833.65 on Thursday, its highest level since June 16. Bullion is up 0.8% this week.
US gold futures fell 0.2% to $ 1,825.40.
“There has been a steady decline in yields even as inflation rises. This is an indication that the world economy may have seen the best and will slow down in the future … For this reason, gold looks attractive to us, ”said Kunal Shah, head of the research at Nirmal Bang Commodities in Mumbai.
“I don’t expect gold to drop below $ 1,800 in the near term and it has the potential to test $ 1,900 again.”
Fed Chairman Jerome Powell faced questions about inflation and banking regulations during a hearing before the Senate Banking Committee on Thursday, and reiterated his pledge of “strong support” to complete the recovery US economy, sending US Treasury yields to a one-week low.
Lower interest rates lower the opportunity cost of holding unproductive gold, which is also seen as a hedge against inflation that could result from widespread stimulus measures.
Making gold expensive for holders of other currencies, the dollar was heading for its best weekly gain in almost a month.
Elsewhere, palladium rose 0.2% to $ 2,735.66 an ounce, but was heading for its first weekly decline in four.
“We believe palladium has likely peaked this year and is expected to trade lower until 2022,” UBS analyst Giovanni Staunovo said in a note, adding that demand for automotive palladium catalysts may be. affected by the replacement of palladium by platinum.
Platinum fell 0.6% to $ 1,131.50 an ounce, but rose 2.6% for the week.
Silver fell 0.6% to $ 26.18 an ounce.
Reporting by Eileen Soreng in Bengaluru, editing by Sherry Jacob-Phillips and Jason Neely