PRECIOUS-Gold dips as U.S. bond yields edge up, dollar firms

Reuters

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 (Updates prices)
    * U.S. retail sales down 1.9% in December 
    * Gold set to gain for the week 

    By Kavya Guduru
    Jan 14 (Reuters) - Gold prices slipped on Friday, weighed
down by an uptick in Treasury yields on prospects of U.S.
interest rate hikes and a stronger dollar. 
    Spot gold  XAU=  was down 0.3% at $1,816.22 per ounce by
13:56 ET (1856 GMT). U.S. gold futures  GCv1  settled down 0.3%
at $1,816.50.
    Benchmark U.S. 10-year Treasury yields  US10YT=RR  firmed,
while the dollar rose 0.4% against its rivals  =USD , making
bullion costlier for overseas buyers.  USD/  US/ 
    Gold gained briefly after the release of data showing retail
sales tumbled by 1.9% in December as Americans struggled with
shortages of goods due to supply chain bottlenecks and an
explosion of COVID-19 infections.  urn:newsml:reuters.com:*:nL1N2TT2FW
    Gold is acting as a placeholder in people's portfolios
"until the dust settles" in terms of where the economy is going,
said Philip Streible, chief market strategist at Blue Line
Futures in Chicago.  
    The weak data this week could eventually either cause a
sell-off in wider markets or prompt the Federal Reserve to curb
rate hike expectations, and gold gets a tailwind either way,
Streible added.
    However, overall declines in the dollar this week put
bullion on track for a weekly gain of about 1.1%. 
    Gold is considered a hedge against surging inflation, but
interest rate hikes translate into higher opportunity cost of
holding non-yielding bullion. 
    "Considering that markets will ultimately remain intensely
focused on the Fed's exit, fewer sources of upside flow in the
coming weeks could leave gold prices vulnerable to a
consolidation", TD Securities said in a note. 
    Spot silver  XAG=  fell 0.9% to $22.86 an ounce, and was en
route to post a 2.5% weekly gain.
    Platinum  XPT=  was down 0.2% to $967.32 and was set to gain
about 1.2% this week, while palladium  XPD=  fell 0.3% to
$1,882.12 and poised for a weekly drop of nearly 2.7%. 

 (Reporting by Kavya Guduru in Bengaluru
Editing by Shailesh Kuber and Mark Potter)
 ((Kavya.Guduru@thomsonreuters.com;))

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