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Gold steadied on Friday as weak US retail sales data countered pressure from an uptick in the dollar and Treasury yields, with overall weakness in the dollar keeping bullion on course for its best week since mid-November.

Spot gold was unchanged at US$1 821,66 per ounce by 10:45 am on Friday.

US gold futures rose 0,1 percent to US$1 822,60.

Gold gained briefly after the release of data showing retail sales tumbled by 1,9 percent in December as Americans struggled with shortages of goods due to supply chain bottlenecks and an explosion of Covid-19 infections.

Gold is acting as a placeholder in people’s portfolios “until the dust settles” in terms of where the economy is going, said Philip Streible, chief market strategist at Blue Line Futures in Chicago.

The weak data this week could eventually either cause a selloff in wider markets or prompt the Federal Reserve to curb rate hike expectations, and gold gets a tailwind either way, Streible added.

However, benchmark US 10-year Treasury yields and the dollar firmed (.DXY), making bullion costlier for overseas buyers.

Overall declines in the dollar this week put bullion on track for a weekly gain of about 1,4 percent, its biggest percentage rise in nine weeks.

Gold is considered a hedge against surging inflation, but interest rate hikes translate into higher opportunity cost of holding non-yielding bullion.

Considering that markets will ultimately remain intensely focused on the Fed’s exit, fewer sources of upside flow in the coming weeks could leave gold prices vulnerable to a consolidation, TD Securities said in a note.

Spot silver rose 0,5 percent to US$22,96 an ounce, and was en route to post its best week in two months.

Platinum was up 0,6 percent at US$975,74 and was set to gain about 2 percent this week, while palladium was unchanged at US$1 888,22 and poised for a weekly drop of nearly 3 percent.  — Reuters.