Gold heads for weekly fall as yields, dollar climb

Gold heads for weekly fall as yields, dollar climb

Gold prices dipped on Friday and were on track for their first weekly loss in three, as rising U.S. Treasury yields and a firmer dollar dented bullion's appeal.

Spot gold was down 0.2% at $1,947.36 per ounce, as of 0829 GMT. U.S. gold futures rose 0.2% to $1,952.10.

"The outlook for gold is subdued as rising rates obviously weigh, but until we break the trading range (between $1,930 to under $2,000) in a convincing manner ... we really don't have much of a direction for gold," said Michael McCarthy, chief strategy officer at Tiger Brokers, Australia.

Benchmark U.S. 10-year Treasury yields extended gains as Federal Reserve officials took a hawkish tone on tightening policy, cementing the view that the U.S. central bank will hike interest rates aggressively as it fights soaring inflation.

Gold is highly sensitive to rising U.S. short-term interest rates and higher yields, which increase the opportunity cost of holding non-yielding bullion.

A stronger U.S. dollar could also pressure gold, while geopolitical uncertainty remains a support; gold price is stuck in the middle of those two conflicting currents, McCarthy said.

A firmer dollar makes greenback-priced gold less attractive for overseas buyers.

Gold is down about 1.3% so far this week. Prices rose to near the