LONDON: Gold eased on Friday, heading towards its biggest weekly decline in 2-1/2 months, as the dollar climbed from last week’s three-year low on the back of higher Treasury yields.

The precious metal has come under heavy pressure this week from a recovery in the US currency and expectations that the US Federal Reserve will press ahead with increases to interest rates this year, which tend to weigh on non-yielding bullion.

Spot gold was down 0.2 per cent at $1,328.66 an ounce at 1430GMT, its fifth losing session in six. US gold futures were down 0.2pc at $1,330.50.

Spot prices have shed 1.4pc this week, their biggest weekly decline since early December, after failing to sustain a brief push back above $1,360 an ounce last Friday.

“Once again gold failed to break resistance at $1,360/1,370,” said ActivTrades analyst Carlo Alberto de Casa.

“Despite the hawkish stance by the Fed, which drove this move in the gold price, we are still above the $1,300 mark,” said Think Markets’ chief market analyst Naeem Aslam, flagging a key support level.

“We think some participants were surprised and unprepared, which created the largest weekly loss for this year.”

On the physical gold markets, traders said buying was muted in China after the week-long Lunar New Year holiday that closed financial markets until Thursday.

“China’s return to the market following their New Year holidays did little to ignite interest in gold,” MKS said in a note.

“Mild buying (acted) only to provide underlying support for prices, rather than see the metal higher.”

Among other precious metals, silver was down 0.4pc at $16.54 an ounce, palladium firmed by 0.2pc to $1,040.30 and platinum dipped by 0.3pc to $987.49.

Published in Dawn, February 24th, 2018