On rising Us treasury yield which has gone to 1-year high, gold price in international markets on Friday slumped to a 1-week low and are headed for second straight week of decline as higher yield reduced the safe haven appeal of gold.
Spot gold was steady at $1,770.15 per ounce by 0046 GMT, having earlier fallen to its lowest since Feb. 19 at $1,764.90. Prices were down 0.6% for the week so far.
On Thursday, on inflationary concerns and rising economic upturn, the US dollar was lifted and that vaulted the treasury yield.
Back home, in India too gold prices on the MCX were not impacted by the same scale and still traded above Rs. 46000 at Rs. 46362 per 10gm.
Navneet Damani, Vice President, Motilal Oswal Financial Services (MOFSL) said, "Gold prices traded as volatility in US Treasury yields and dollar and Federal Reserve Chairman Jerome Powell's dovish comments kept market participants on the edge. Benchmark US Treasury yields hovered near a one-year peak hit in the previous session. The dollar, on the other hand, languished near three-year lows against its major crosses. Governor Powell's statement's continue to add weight to the US central bank's promise to get the economy back to full employment, and to not worry about inflation unless prices begin rising in a persistent and troubling way."
Also, amid the volatility there has been a drag in gold ETF holding, which may also be a deterrent for gold price.