Gold prices generally went sideways on Friday as US Treasury bond yields fell, thereby reducing the opportunity cost of holding precious metals, while safe-haven demand was at a sluggish level, causing prices to be contained as investors assessed negotiations between the US and Iran.
Spot gold slightly decreased by 0.1% to $5,180.97/ounce in this afternoon's trading session. The US 10-year benchmark yield in the day fell to its lowest level in three months.
The real yield of 10-year US Treasury bonds, i.e. yield after inflation, has plummeted and is currently a supporting factor, helping gold maintain stability despite the risk premium falling yesterday after US-Iran talks," said Kelvin Wong, senior market analyst at international financial firm OANDA.
Gold prices are heading for their seventh consecutive month of gains, increasing by more than 6% in February, a period in which new US tariff incertitudes and US-Iran tensions have strengthened the safe haven attractiveness of the precious metal.
According to Oman, the intermediary country, the US and Iran have made some progress in Geneva on Thursday regarding Tehran's nuclear program, but many hours of negotiations have still ended without a breakthrough to prevent the possibility of the US launching attacks in the context of strongly strengthened military forces.
US gold futures for April delivery rose 0.3% to $5,209.20/ounce.
The USD is heading for a 0.6% increase in the month, as signals show that the US Federal Reserve (Fed) has a more "hawkish" stance, making gold valued in USD more expensive for holders of other currencies.
The prospect of early interest rate cuts from the beginning of Mr. Kevin Warsh's term, the candidate for Fed Chairman, in line with President Donald Trump's expectations, seems to be shrinking in the context of positive signals about the US economy.
The number of Americans applying for initial unemployment benefits increased slightly last week, but data shows that the unemployment rate seems to remain stable in February, reflecting a generally solid labor market.
According to CME's FedWATCH tool, the market currently expects the Fed to cut at least three times, each time by 25 basis points, this year.
On the other precious metal market, spot silver rose 1.6% to 89.73 USD/ounce and is heading for an increase of 6.1% in the month. Platinum rose 5.2% to 2,260.09 USD/ounce, the highest level in four weeks, while palladium rose 2.3% to 1,825.29 USD/ounce.
