Dollar Strength and Rising Treasury Yields Push Gold Prices Lower

Despite a stronger U.S. dollar and higher Treasury yields, gold prices fell on Friday, sending them into the red for the week.

Price action

• The price of gold for April delivery GC00, -0.40% GCG23, -0.14% was down $3, or 0.2%, with an ounce trading at $1,867 on the Comex exchange.
• At $22.12 per ounce, silver prices for March SI00, -0.28% SIH23, -0.28% delivery dropped by 3 cents, or 0.1%, to settle at $22.12.
• The palladium price for the month of March PAH23, -4.31% declined by $31.70, or 2%, to $1,585 per ounce, while the platinum price for April PLJ23, -0.12% rose by $2, or 0.2%, to $966 per ounce.
• A pound of copper costs $4.051, down 5 cents, or 1.1% for March, according to the HGH23 report, -1.53% for that month.

Market drivers

Several market analysts believe that the recent weakness in gold is due to a revived U.S. dollar and higher Treasury yields, which were announced Friday.

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It has been an up week for the greenback and yields over the past week as a flurry of economic data - including the ISM services sector survey and January payroll report - both of which prompted traders to reevaluate their expectations about when interest rates would peak and when the Fed might eventually cut interest rates again, prompted traders to reevaluate their expectations.

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It continued to be a down market for precious metals with gold hovering around $1860 and silver hovering just above $22.00 as bond yields pushed higher and the dollar remained supported. It has been evident in recent days that the dollar has been revitalized, as well as being supported on dips as a result of the Fed's hawkish comments and mixed data, according to Fawad Razaqzada, a market analyst at City Index and FOREX.com.

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The ICE U.S. Dollar Index DXY, which measures the greenback's strength against a basket of rival currencies, climbed 0.3% to 103.49 on Friday. 1.8 basis points raised to 3.700% the yield on the 10-year Treasury note TMUBMUSD10Y, 3.699%.

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Gold becomes more expensive for buyers in other currencies when the dollar strengthens, while bonds become more attractive when the yields rise.

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Analysts have also told us that some traders are hesitant to open new long positions ahead of Tuesday's U.S. consumer price index report, which will show the inflation rate for the month of May.