* Silver on track for the best week in seven
* US retail sales must begin at 12:30 GMT (prices have been updated)
Oct 15 (Reuters) – Gold prices fell on Friday as US bond yields rebounded, although a depreciation in the dollar helped the precious metal hit its best week since late August.
Spot gold fell 0.8% to $ 1,780.76 an ounce by 11.01 GMT. US gold futures fell 0.9% to $ 1,782.60.
Reducing the attractiveness of gold due to higher opportunity costs, the 10-year US Treasury yield rebounded from more than a week’s low reached on Thursday.
“There is a growing expectation that the Fed and other central banks are going to tighten their monetary policy, which should support yields, and when yields rise, gold tends to struggle,” said Fawad Razakzada, an analyst at ThinkMarkets.
“However, investors probably only expect a modest tightening from the big central banks, and this shouldn’t pose much of a problem for gold as investors hedge against higher prices.”
While most Fed policymakers agree that the central bank may start cutting monthly bond purchases as early as next month, they are sharply divided over inflation and what they should do about it.
Gold is often viewed as a hedge against inflation, although reduced incentives and higher interest rates lead to higher government bond yields, raising the opportunity cost of owning non-profitable bullion.
Investors are now awaiting US retail sales data at 12:30 GMT.
“While gold could face resistance on the 100 and 200-day moving averages of around $ 1,798 and $ 1,795 respectively, gold could cross that threshold if US economic data – especially retail sales – turns out to be weaker and the dollar depreciates in response. “, – Commerzbank analysts wrote in the note.
Gold continues to climb 1.4% over the week amid a weakening dollar index, lowering the cost of gold for buyers holding other currencies.
Spot silver fell 1.3% to $ 23.23 an ounce but is targeting its biggest weekly gain in seven.
Platinum => fell 0.5% to $ 1,050.24 while palladium rose 0.4% to $ 2,136.55. (Reporting by Nakul Iyer in Bangalore; editing by Jason Neely, Kirsten Donovan)
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