Gold dips as higher dollar, US bond yields weigh

Gold eased on Wednesday, as the dollar and Treasury yields firmed, but prices were range-bound as investors awaited fresh cues on top central banks’ monetary policy plans, especially from the U.S. Federal Reserve.

FUNDAMENTALS


* Spot gold fell 0.3% to $1,827.69 per ounce by 0101 GMT, extending losses to a fourth straight session. U.S. gold futures dropped 0.5% to $1,830.20.

* The dollar strengthened, making greenback-priced bullion more expensive for buyers holding other currencies.

* The Fed will likely deliver another 75 basis point (bp) interest rate hike in July, followed by a 50 bp rise in September, and won’t scale back to quarter percentage point moves until November at the earliest, according to economists polled by Reuters.

* Higher interest rates and bond yields increase the opportunity cost of holding gold, which yields nothing.

* Benchmark U.S. 10-year Treasury yields also rose, making bullion less appealing.

* Market participants will likely be keeping an eye on Fed Chair Jerome Powell’s testimonies in Washington D.C. this week.

* European Union leaders aim to maintain pressure on Russia at their summit this week by committing to further work on sanctions, a draft document showed, with gold among assets that may be targeted in a possible next round of measures.

* Euro zone governments should not expect unconditional support under the European Central Bank’s new tool to stop borrowing costs from rising too far for the most indebted countries, two ECB policymakers said on Tuesday.

* SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.16% to 1,073.80 tonnes on Tuesday from 1,075.54 tonnes on Friday.

* Spot silver dipped 0.8% at $21.50 per ounce, platinum fell 0.5% to $932.79, and palladium dropped 0.6% to $1,867.02.

DATA/EVENTS (GMT)


0600 UK CPI YY May

1400 EU Consumer Confid. Flash June

Source link

Recent Posts

Scan to Download
ios&Android APP

Open trading account and start trading!

Join our happy customers