Gold held steady even as Treasury yields posted sharp declines, amid recent dovish commentary from Federal Reserve officials that indicated further interest rate rises this year are unlikely.
Yields on US government bonds notched some of their biggest one-day losses all year on Tuesday as swap markets scaled back bets the central bank will hike rates again in 2023. While tighter monetary policy is typically negative for non-yielding bullion, gold was flat in the previous session on probable profit taking after prices surged earlier this week following Hamas’s shock attack on Israel.
Still, the recent decline in both the dollar and US 10-year yields provide “some hope that gold can hold on to some of these recent gains, especially given that safe haven demand typically supports gold prices only temporarily,” Commonwealth Bank of Australia analyst Vivek Dhar said in a note.
Spot gold was steady at $1,861.43 an ounce as of 9:03 a.m. in Singapore, and was up 1.5% this week. The Bloomberg Dollar Spot Index dipped 0.1% after falling 0.3% on Tuesday. Silver and platinum edged lower, while palladium was little changed.
Source : Bloomberg
