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Gold prices pull back from record levels on stronger US Dollar

Gold prices fell off from a record high on Friday as the US dollar rose to a month high in the wake of the Fed’s three rate cut reveal and the surprise rate cut by the Swiss National Bank.
That move, the Fed’s ‘dot plot’ forecasts and the dovish noises from the Bank of England merged to push US bond yields lower and the value of the greenback higher.

Treasury yields narrowed with the yield on the US two-year bond dropping 3.9 basis points to 4.598%, while the 10-year note was paying 4.202%. down 6.2 basis points on the day and down nearly 12 points for the week.

Gold for June delivery closed down $US24.90 to settle at $US2,181.60 an ounce, a day after closing above the US$2,200 mark for the first time.

The front month in the Comex continuous gold contract settled lower at $US2,160 an ounce but edged up after hours to finish just over $US2,166 an ounce.

Normally the dovish speak on rates should have been bullish for gold, as should have been the drop in yields.

But there was a rise in the value of the greenback after the Chinese yuan fell sharply and government banks sold dollars to support the Chinese currency and all of that saw some investors prefer the safety of greenbacks for the weekend.

That in turn saw the ICE dollar index up 1.01 points to 104.45, the highest since in a month.

The Aussie dollar softened to 65.21 US cents, down 0.75% on the day and a smaller 0.5% for the week.

Comex copper dropped back under the $US4 a pound level – but not by much as it ended the week around $US3.99 a pound.

That was still down 3% for the week as the zoom went out of prices in the wake of the Chinese processor decisions to curtail production for a while.