Gold Prices Climb Well Off Worst Levels But Close Modestly Lower
After moving sharply lower at the open, the price of gold regained some ground over the course of the trading day on Friday but still closed modestly lower.
Gold for April delivery dipped $2.80 to $1,719.50 an ounce but ended the day well off its low of $1,699.00 an ounce.
The initial weakness by gold prices came amid a jump by U.S. treasury yields, with the yield on the benchmark ten-year note surging back above 1.6 percent to its highest levels in over a year.
The increase in yields came after President Joe Biden directed states to make all adults eligible for a coronavirus vaccine by May 1st.
The vaccine news combined with the new $1.9 trillion stimulus package has generated optimism about the economic outlook, reducing the appeal of bonds. Bond yields move in opposite direction to prices.
Yields saw further upside following the release of a report from the University of Michigan showing U.S. consumer sentiment improved by much more than expected in the month of March.
The University of Michigan said its consumer sentiment index jumped to 83.0 in March after dipping to 76.8 in February. Economists had expected the index to inch up to 78.5.
With the much bigger than expected increase, the consumer sentiment index reached its highest level since hitting 89.1 in March of 2020.
A separate report released by the Labor Department released showed U.S. producer prices increased in line with economist estimates on the month of February.
Nonetheless, the price of gold rebounded as the day progressed, with traders picking up the precious metal at somewhat reduced levels.
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