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Gold steady on dollar pullback, U.S. Treasury yields

written by Bella Palmer

Spot gold was little changed at $1,800.09 per ounce after rising 1.6% last week

Gold prices held steady near the key psychological level of $1,800 per ounce on Monday, supported by a pullback in the dollar and U.S. Treasury yields.

Spot gold was little changed at $1,800.09 per ounce, as of 0033 GMT, after rising 1.6% last week.

U.S. gold futures were flat at $1,815.10.

Benchmark U.S. 10-year Treasury yields edged lower to 2.8421% after hitting a three-week peak on Friday, decreasing the opportunity cost of holding non-interest-bearing gold.

The dollar slipped 0.1% against its rivals, making gold less expensive for other currency holders.

Richmond Federal Reserve Bank President Thomas Barkin said on Friday he wants to raise interest rates further to bring inflation under control.

Data showed U.S. import prices fell for the first time in seven months in July, helped by a strong dollar and lower fuel and nonfuel costs, while consumers’ one-year inflation outlook ebbed in August, the latest signs that price pressures may have peaked.

Although gold is seen as a hedge against inflation, rising U.S. interest rates dull non-yielding bullion’s appeal.

Asian shares inched higher with investors anxious to see if Wall Street can sustain its rally as hopes U.S. inflation has peaked will be tested by likely hawkish commentary from the Fed this week.

Japan’s economy expanded for the third straight quarter on solid private consumption, data for April-June showed.

High domestic prices restrained physical gold demand in India last week, while uncertainty surrounding Taiwan-related developments prompted bullion importers in China to hold off on big purchases.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.15% to 995.97 tons on Friday.

Spot silver eased 0.2% to $20.78 per ounce, platinum fell 0.3% to $959.69, and palladium was steady at $2,223.83.


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