Gold. Picture: REUTERS
Gold. Picture: REUTERS

Bengaluru — Gold prices edged down on Friday to near their lowest levels this year, pressured by a firm dollar amid surging US Treasury yields.

Spot gold was down about 0.1% at $1,289.16 an ounce at 2.53am GMT, after hitting its lowest since December 27 in the previous session, at $1,285.41.

The metal was heading for its biggest weekly decline since early December.

US gold futures for June delivery were 0.1% lower at $1,288.30 an ounce.

The dollar hovered near a five-month peak against a basket of currencies on Friday thanks to the benchmark US Treasury yield topping a seven-year high.

"The 10-year US yields put the dollar on a firm foot and put pressure on metals and gold," said a Hong Kong-based trader, adding that some "risk-on" sentiment in markets today was also adding pressure.

A stronger greenback makes dollar-denominated gold more expensive for users of other currencies, while higher US yields dampen the appeal of non-yielding bullion.

The trader said that "$1,285 has been good support for the past couple of days, so that’s the first support we’ll see if it (spot gold) can hold".

He declined to be identified as he was not authorised to speak with media.

Meanwhile, Asian stocks were treading water on Friday as investors kept a cautious watch on developments in US-China trade negotiations.

US President Donald Trump said on Thursday that China had become "very spoiled" on trade with the US and cast doubt on the success of his efforts to rebalance the relationship with Beijing, as high-stakes US-China negotiations opened in Washington.

Also on Thursday, Trump sought to placate North Korean leader Kim Jong-un after Pyongyang threatened to scrap an unprecedented summit.

"Without some resolution on both North Korea as well as the ongoing trade talks with the Chinese, we suspect the overall drift in markets will likely continue, with the path of least resistance for gold against such a backdrop being lower," INTL FCStone analyst Edward Meir said in a note.

In other metals, silver was little changed at $16.41 an ounce.

Palladium rose 0.2% to $979.50 an ounce, while platinum was 0.2% higher at $890.20 an ounce, after hitting a five-month low at $879 on Thursday.

However, all three of those metals were heading for weekly losses.