PRECIOUS-Gold prices fall, set for biggest weekly drop in a month

BY Reuters | TREASURY | 06/17/22 02:09 AM EDT
       * Platinum and palladium also set for weekly drops
    * Gold needs clarity on rates' impact to find direction -
analyst
    * Stocks face worst week since pandemic meltdown in March
2020

 (Updates details and prices)
    By Bharat Gautam
    June 17 (Reuters) - Gold fell on Friday as a higher dollar
and rising U.S. Treasury yields hit demand for greenback-priced
bullion, and put prices on track for their biggest weekly drop
since mid-May.
    Spot gold        dropped 0.6% to $1,846.33 per ounce by 0553
GMT. U.S. gold futures        dipped 0.1% to $1,849.00.
    Gold prices have fallen about 1.3% in what has been a
volatile week, after starting it near a one-month peak before
hitting a four-week low on Tuesday.
    "We haven't really moved a whole lot. We're still kind of
stuck in this $1,800 to $1,880-90 range looking for direction",
and gold needs clarity on the impact of rates, said Ilya Spivak,
a currency strategist at DailyFX.
    "That clarity will either have investors say - yes, I think
inflation is going to be contained - gold lower, or no - I don't
think inflation is going to be contained, I want an alternative
store of value - gold higher," Spivak said.
    World stocks headed for their worst week since a market
meltdown in the pandemic's beginning in March 2020, as investors
worried about growth in the face of global rate hikes.

    The U.S. Federal Reserve announced its biggest interest rate
hike since 1994 this week, as it scrambles to rein in soaring
inflation. Rising rates in the United States increase the
opportunity cost of holding non-yielding gold.

    "Going forward, we expect dollar strength and recovering
bond yields to cap gold prices", as the Fed delivers on its
hawkish stance, Fitch Solutions said in a note.
    "However, prices will not collapse back to pre-COVID-19
levels as gold will remain supported by the evolving
Russia-Ukraine war, rising global inflation, and the still
persisting pandemic."
    Spot silver        fell 0.3% to $21.87 per ounce. Platinum
       dipped 0.2% to $948.50, while palladium        rose 1.8%
to $1,912.69, with both headed for weekly declines.


 (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.

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