2021.10.1510:34:00UTC+00Gold Dips As Yields Rebound

Gold prices dipped on Friday as U.S. bond yields rebounded, denting the appeal of the non-yielding bullion.

Spot gold dropped 0.7 percent to $1,783.14 per ounce, while U.S. gold futures were down 0.8 percent at $1,783.65.

The yields on the key 10-year U.S. Treasury note was up 2.7 basis points to 1.546 percent while the dollar index slipped slightly and was down 0.2 percent for the week in what would be its first weekly loss in six weeks.

Yields remain supported amid expectations that the Federal Reserve and other central banks are going to tighten their monetary policy.

Overnight data showed that U.S. jobless claims fell more than expected last week to their lowest level since March 2020, a sign the job market is still improving.

However, U.S. producer prices rose at a moderate pace in September helping cool fears of stagflation.

U.S. President Joe Biden signed the legislation raising the debt limit to $28.9 trillion, avoiding the risk of a default on October 18.

The short-term extension would grant the U.S. Treasury capacity to issue debt to fund government operations through early December.