Gold prices climb on softer dollar, lower US Treasury yields

Synopsis

Gold prices rose on Friday, buoyed by a weaker dollar and falling U.S. Treasury yields as geopolitical tensions escalated in the Middle East. Despite a weekly dip, bullion found support from easing yields, while oil prices surged above $100 a barrel amid concerns over global energy supply.

Gold prices climbed on Friday, supported by a weaker dollar and declining U.S. Treasury yields, while investors assessed the economic implications of an escalating Middle East conflict.

FUNDAMENTALS

* Spot gold was up 0.7% at $5,112.34 per ounce, as of 0059 GMT. U.S. gold futures for April delivery edged 0.2% lower to $5,115.80.
* Bullion, however, has lost roughly 1% so far ‌this week, weighed ⁠down ⁠by fading hopes for near-term U.S. interest-rate cuts as higher energy prices fuel inflation concerns.
* The dollar nudged lower, making greenback-priced commodities such as bullion cheaper for holders of other currencies.
* The U.S. 10-year Treasury yields eased, increasing the appeal of non-yielding bullion.

* Heightening geopolitical tensions, Iran's Supreme Leader Mojtaba Khamenei said on Thursday that Tehran will keep the strategic Strait of Hormuz closed as ⁠leverage against ‌the United States and Israel, a development that has stoked concerns about global energy supply and risk assets.
* Oil prices rose above $100 ⁠a barrel, as attacks on oil tankers in the Gulf and warnings from Iran shattered prospects of quick de-escalation in the Middle East conflict.

* As oil prices surged, U.S. President Donald Trump again demanded Federal Reserve Chair Jerome Powell cut interest rates. * Goldman Sachs analysts on Thursday pushed back their forecast for the next U.S. Fed rate cut to September and December, from June previously.

* Traders expect the ‌Fed to keep rates steady in the current 3.5%-3.75% range at the end of its two-day meeting on March 18, according to CME Group's FedWatch tool.

* While ⁠recent inflation data suggest price growth is under control, the war on Iran and the resulting spike in crude prices have yet to filter through the data.

* Investors are now awaiting release of January's delayed Personal Consumption Expenditures Index, due later in the day. * Spot silver was up 1.5% at $85.03 per ounce. Spot platinum gained 1.3% to $2,159.01 and palladium rose 0.8% to $1,630.71.

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