Precise Investors

Alternative Investments

Gold firms despite higher U.S. yields


Spot gold added 0.8% to $2,333.79 per ounce and U.S. gold futures settled 0.2% higher at $2,342.5

Gold prices firmed on a weaker dollar on Thursday, even as U.S. Treasury yields increased after economic data showed signs of persistent inflation, lowering hopes of the Fed cutting interest rates anytime soon.

Spot gold added 0.8% to $2,333.79 per ounce by 1807 GMT. Prices were down almost $100 from an all-time high of $2,431.29 hit on April 12, driven by geopolitical tension.

U.S. gold futures settled 0.2% higher at $2,342.5.

The dollar eased in tight seesaw trade after data showed that U.S. economic growth slowed more than expected in the first quarter, but a rise in inflation suggested the Federal Reserve would not trim interest rates before September.

Gold is trading on the additional data point that shows that the Fed is not in a position to cut rates anytime soon, according to Bob Haberkorn, senior market strategist at RJO Futures.

U.S. Treasury yields reached more than five-month highs after the data was released.

Gold is traditionally known as an inflation hedge, but higher interest rates reduce the attraction of holding non-yielding bullion.

After a very dramatic move higher in gold over the course of the last several weeks, it is in the midst of a consolidation, said David Meger, director of metals trading at High Ridge Futures.

He added: Certainly that could change in the short term if we see an inflationary data that comes out very benign and inflation is much more reduced.

The March core PCE Price Index data is due on Friday.

In the meantime, top consumer China’s net gold imports via Hong Kong climbed 40% in March from the previous month, data showed.

Spot silver added 0.7% to $27.36 per ounce.

Platinum advanced 1.5% to $915.75, and palladium shed 1.7% to $983.75.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Precise Investors. The information provided on Precise Investors is intended for informational purposes only. Precise Investors is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

Leave a Reply