Gold bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, August 14, 2019. REUTERS/Michael Dalder

Feb 9 (Reuters) – Gold prices were subdued on Friday, hurt by a stronger dollar and higher Treasury yields, while investors looked ahead to next week’s U.S. inflation reading for clues on when the Federal Reserve could begin cutting interest rates.

Spot gold XAU= was down 0.2% to $2,029.80 per ounce at 1236 GMT, with prices down 0.5% over the week. U.S. gold futures GCcv1 also lost 0.2% to $2,044.50 per ounce.

The dollar index .DXY remained on track for a weekly rise, making gold more expensive for holders of other currencies, while the U.S. 10-year Treasury yield US10YT=RR also edged higher. USD/US/

Jigar Trivedi, a senior analyst at Reliance Securities, said that Fed Chair Jerome Powell’s recent comments had reduced the probability of an interest rate cut in March, putting a cap on gold prices.

After several Fed policymakers this week said they would wait to cut rates until they were more confident that inflation would fall to 2%, all eyes will be on Tuesday’s U.S. consumer price index report.

Traders now see about a 61% chance of an interest rate cut in May, according to the CME Fedwatch tool. Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

On the physical front, physical gold dealers in India charged premiums this week for the first time in four months, encouraged by a pick-up in purchases as local prices eased, while the approaching Lunar New Year festival boosted activity in China and elsewhere.


Elsewhere, palladium XPD= rose 0.3% to $889.62 per ounce and platinum XPT= was down 0.5% to $880.56. Prices of both metals were heading for a second weekly dip.

Prices of auto-catalyst metal palladium fell below those of platinum for the first time since April 2018 on Thursday.

“Challenging supply backdrop, heavy platinum loadings and substitution away from palladium are boding well for platinum,” analysts at ANZ Research wrote in a note.

Spot silver XAG= rose 0.2% to $22.62.

Platinum-to-palladium ratio

Spot gold price in USD per oz


(Reporting by Sherin Elizabeth Varghese and Brijesh Patel in Bengaluru; Editing by Kirsten Donovan and Mark Potter)