PRECIOUS-Gold dips as dollar, Treasury yields recover; faces worst week in a month

BY Reuters | TREASURY | 06/16/22 09:27 PM EDT
       June 17 (Reuters) - Gold prices fell on Friday, as the
dollar and U.S. Treasury yields recovered after declining in the
previous session and put bullion on track for its biggest weekly
drop in a month.

    FUNDAMENTALS
    * Spot gold        was down 0.6% at $1,845.89 per ounce as
of 0104 GMT. U.S. gold futures        were flat at $1,849.20.
    * Benchmark U.S. 10-year Treasury yields strengthened after
a sharp fall on Thursday, weighing on demand for non-yielding
gold.
    * The dollar index        also rose, making greenback-priced
bullion less attractive.
    * World stocks plummeted again on Thursday, after a series
of rate rises from global central banks rekindled fears that
aggressive policy tightening could drag economies into
recession.
    * Gold prices have fallen about 1.3% in what has been a
volatile week, and its worst since mid-May, after starting it
near a one-month peak before hitting a four-week low on Tuesday.
    * The U.S. Federal Reserve announced its biggest interest
rate hike since 1994 on Wednesday, as it scrambles to rein in
soaring inflation. Rising rates in the United States increase
the opportunity cost of holding gold.
    * The Bank of Japan is likely to maintain ultra-low interest
rates in its policy meeting later in the day and stress its
resolve to support a fragile economy with massive stimulus, a
move that may further weaken the yen by highlighting a policy
divergence with the rest of the world.
    * Spot silver        fell 0.9% to $21.73 per ounce, and is
down about 0.7% this week.
    * Platinum        dipped 0.9% to $942.44, and has dropped
about 3.2% for the week.
    * Palladium        rose 0.2% to $1,869.24, but is still set
for a third consecutive weekly fall, having lost about 2.6%.


DATA/EVENTS (GMT)
0900  EU  HICP Final MM, YY         May
1315  US  Industrial Production MM  May


 (Reporting by Bharat Govind Gautam in Bengaluru; Editing by
Rashmi Aich)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

fir_news_article