Gold eases as US yields edge higher; stumbling dollar caps losses

8 months ago 76

Spot gold was 0.1% lower at $1,823.24 per ounce by 1020 GMT. U.S. gold futures fell 0.3% to $1,822.20

Gold Prices | Gold


By Seher Dareen

(Reuters) - Gold prices edged lower on Thursday as benchmark 10-year Treasury yields recovered some losses, but the precious metal stayed close to last session's one-week high as the dollar extended its slide.

Spot gold was 0.1% lower at $1,823.24 per ounce by 1020 GMT. U.S. gold futures fell 0.3% to $1,822.20.

In the previous session, bullion rose to $1,827.92, its highest since Jan. 5.

"Gold's performance is in a way slightly disappointing, bearing in mind the pretty seismic collapse in the U.S. dollar ... gold might have performed as one would expect it to, but hasn't gotten to the big $1,835 per ounce figure, considering the inflation data," said Ross Norman, an independent analyst.

Data on Wednesday showed U.S. consumer prices surged in December, with the annual increase in inflation the largest in nearly four decades, cementing expectations the Federal Reserve will start raising interest rates as early as March.

Gold is considered an inflationary hedge, but the metal is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion. [US/]

The U.S. 10-year yield edged higher after falling in the last session, while the dollar index dipped to a two-month low.

"The dollar may regain its mojo on rate hike bets with Treasury yields pushing higher. Should this become a reality, gold could be in store for fresh pain down the road," FXTM analyst Lukman Otunuga said in a note.

On a technical basis, gold has the potential to push higher towards $1,845 if a daily close above $1,831 is achieved, Otunuga said, adding that a decline back below $1,810 could prices move lower towards $1,800, $1,786 and $1,770.

Spot silver rose 0.2% to $23.15 an ounce, platinum fell 0.3% to $974.49, and palladium was little changed at $1,910.60

(Reporting by Seher Dareen and Swati Verma in Bengaluru. Editing by Janen Merriman)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Read Entire Article