Gold Slips to Weekly Low as Dollar Strength and Yields Rise

Gold prices edged up on Friday but remained headed for a weekly decline. The non-yielding metal is struggling near $4,300 as a stronger dollar and rising US Treasury yields test investor appetite.

The dollar index was poised to post a roughly 1% weekly advance near 101.25, while the 10-year Treasury yield traded around 5.19%, its highest in 19 years. This has raised concerns about the opportunity cost of holding gold, which pays no interest.

Philadelphia Fed President Anna Paulson stated that underlying inflation remained in a range of about 2.5% to 3%. She backed last week's quarter-point rate increase and suggested modest further tightening could be warranted if the economy develops as expected.

The immediate question is whether gold can reclaim and hold the $4,300 area after dropping to a weekly low around $4,244 on Thursday. FXStreet analyst Dhwani Mehta said bullion remained vulnerable while trading below important daily moving averages.