Gold Heads for Weekly Loss as Bond Yields and Inflation Concerns Rise

Gold is heading for a weekly decline as persistent energy price increases and renewed inflation concerns pushed bond yields higher and strengthened expectations that the US Federal Reserve may raise interest rates further.

The precious metal edged higher at Friday’s settlement, approaching $4,300 an ounce, but remained around 2% below its level at the end of last week. Spot gold rose 0.5% to $4,296.67 an ounce.

Oil prices, meanwhile, retreated after gaining more than 7% over the previous two sessions, following reports that negotiators were discussing an interim agreement under which Tehran would reopen the Strait of Hormuz in exchange for Washington lifting its blockade on ports.

Gold prices have remained sensitive in recent weeks to elevated energy costs and expectations of further monetary tightening by the Federal Reserve. Higher borrowing costs typically weigh on gold, as the precious metal does not generate interest income.

Among other precious metals, silver gained 1.2% to $64.54 an ounce, although it is still on track for a weekly loss of more than 2%.

Platinum also advanced, while palladium was little changed. The Bloomberg Spot Dollar Index, which tracks the performance of the US currency, fell 0.2% after five consecutive sessions of gains.