Gold set for best weekly gain since Nov as US dollar, yields ease

Jan 14: Gold prices on Friday were poised for their best weekly gain since last November, as investors await economic data that could provide clarity about U.S. Federal Reserve’s tapering policy, while a weaker and Treasury yields supported bullion.

FUNDAMENTALS

* Spot gold was flat at $1,820.08 per ounce, as of 0048 GMT. U.S. gold futures edged down 0.1% at $1,819.50.

* The safe-haven metal climbed 1.4% so far this week.

* The dollar weakened against a basket of currencies on Thursday to a two-month low, a day after data showed an expected surge in U.S. consumer prices in December.

* U.S. 10-year Treasury yields eased off two-year highs hit earlier in the week.

* Fed Governor Lael Brainard on Thursday became the latest and most senior U.S. central banker to signal that the Fed is getting ready to start raising interest rates in March.

* Gold is considered an inflationary hedge, but the metal is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion.

* Investors await major U.S. economic data such as retail sales, industrial production and Michigan sentiment expected later in the day.

* U.S. producer price inflation slowed in December, while the number of Americans filing new claims for unemployment benefits increased to an eight-week high in the first week of January.

* Spot silver shed 0.2% to $23.03 an ounce, platinum was up 0.1% to $970.77, and palladium 0.4% to $1,881.12.