Gold Prices Gain In Asia On Weaker Dollar, Markets Eye US Budget Process

Investing.com – Gold prices gained in Asia on Friday as a weaker dollar brought physical demand into the market.

Gold futures for February delivery on the Comex division of the New York Mercantile Exchange rose 0.29% to $1,331.10 a troy ounce. The fell 0.04% to 90.27 as the US House of Representatives passed a stopgap funding bill for the government, but the Senate may be harder to reach a deal and President Trump has how own concerns.

Gold prices eased from four-month highs as US yields rose sharply after strong growth data from China and amid expectations that inflation would soon gather pace.

Yields on United States 10-Year reached a ten-month high amid strong China economic growth data and rising expectations for faster inflation growth, which pressured gold prices to retreat from four-month highs.

Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

The fall in come amid comments from Macquarie warning that risk of a reversal in gold prices is rising, as it is “harder for gold to ignore the impressive snapback in real yields” since the turn of the year.

The bank said $1,320 to $1,325 is the support zone for gold prices, adding that the market will likely find buyers around these levels.

Despite the bank’s warning, traders remain bullish on the yellow metal as data last week showed they increased their bullish bets on gold for the fourth-straight week.

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