Gold inched higher on Friday and headed for a third straight weekly gain on the back of lower Treasury yields and a weakening U.S. dollar.
Spot gold edged up 0.1 percent to $1,786.08 an ounce and was on track for 0.5 percent gain this week. U.S. gold futures were up 0.2 percent at $1,786.25.
Benchmark 10-year note yields held at 1.552 percent in overnight trading, the lowest since mid-March, as investors looked to the U.S. Federal Reserve meeting next week for directional cues.
Despite recent signs of strength in the world’s largest economy, Fed Chair Jerome Powell is likely to repeat ECB President Lagarde’s message that talk of tapering is premature.
The U.S. dollar was down against major counterparts after reports emerged that the Biden administration is planning to hike the capital gains tax to 39.6 percent from 20 percent for those earning $1 million or more.
The administration is expected to release the proposal next week as part of the tax increase to fund social spending in the upcoming “American Families Plan” worth around $1 trillion.
U.S. new home sales data for March will be published later in the day. New home sales are forecast to climb by 14.3 percent to an annual rate of 886,000 in March after plummeting by 18.2 percent to a rate of 775,000 in February.
Surveys released earlier in the day showed the euro zone’s recovery from its pandemic-induced economic downturn was much stronger than expected in April.
The material has been provided by InstaForex Company – www.instaforex.com