NEW YORK (Reuters) - Gold prices held near one-year highs on Friday as recent U.S. economic data reinforced hopes that the Federal Reserve was close to the end of its rate-hiking cycle, which drove non-yielding bullion towards a second straight weekly rise.
Spot gold was down 0.2% at $2,034.89 per ounce by 1108 GMT, with prices hovering below last session’s high since March 9, 2022. U.S. gold futures fell 0.1% to $2,052.30.
Gold is lower in the session as the opportunity cost of holding bullion is high since bond yields are rising, said Peter Fertig, an analyst with Quantitative Commodity Research.
Euro zone yields were near a month-high as focus shifted to the European Central Bank’s tightening path.
The Fed, meanwhile, considered a rate-hike pause in March in the face of the sudden collapse of two U.S. regional lenders, yet inflationary pressures were seen as more important. The collapse pushed bullion over $2,000.
Gold is considered a hedge against inflation and economic uncertainties, but higher interest rates dim non-yielding bullion’s appeal.
“Gold is placed in a solid positive trend and the first resistance zone is placed at $2,070-$2,075, on the historical high, reached in March 2022,” Carlo Alberto De Casa, external analyst at Kinesis Money, wrote in a note.