Gold prices climb as Treasury yields offset US dollar’s strength

By Bharat Gautam

(Reuters) – rose on Thursday, with greenback-priced bullion drawing on support from slightly lower U.S. Treasury yields and a retreat in the dollar.

Spot gold was up 0.3% at $1,850.84 per ounce, as of 0719 GMT. U.S. gold futures also climbed 0.3% to $1,855.00.

Gold has been in a narrow range between $1,828 and $1,864 for about a week, hovering around $1,850 overall, and prices are consolidating now, GoldSilver Central MD Brian Lan said, adding that (trading in) this range could continue with some investors sitting on the sidelines due to an absence of major news.

Investors are yet to see how gold reacts to lifting of lockdowns in Shanghai; while there could be pent-up demand on the physical side, institutions holding large amounts of gold may liquidate to raise funds, Lan said. [GOL/AS]

Benchmark U.S. 10-year Treasury yields dipped, buoying the appeal of zero-yield gold. [US/]

The dollar eased after hitting a more than one-week peak in the previous session, rekindling some interest in bullion among overseas buyers. [USD/]

“A hawkish Fed (U.S. Federal Reserve), higher real rates, and what still remain anchored medium-term inflation expectations have weighed on gold price momentum amid a relatively robust dollar backdrop,” Citi Research said in a note.

Bullion is considered a safe haven during times of political and economic uncertainty. However, higher short-term U.S. interest rates increase the opportunity cost of holding gold, which bears no interest.

“It also seems likely some geopolitical risk premium has eroded as the market absorbed the Russia/Ukraine conflict. On the other hand, elevated asset market volatility, a potential return of the central bank gold bid, and ‘stagflation’ tail hedges have likely buttressed $1,800 support,” the note said.

Spot silver rose 0.6% to $21.94 per ounce, platinum gained 0.7% to $1,003.51, and palladium climbed 1% to $2,016.19.

(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Sherry Jacob-Phillips, Uttaresh.V and Rashmi Aich)

(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

Source link

Recent Posts

Scan to Download
ios&Android APP

Open trading account and start trading!

Join our happy customers