World gold slightly increased as US bond yields fell

 

World gold slightly increased as US bond yields fell

Gold prices rose slightly on Monday (May 16) as a decline in US bond yields offset the barrier from a relatively strong dollar, which, together with the possibility of interest rate hikes, previously pushed gold down. to the lowest level in more than 3 and a half months.

Closing the session on Monday, the spot gold contract advanced 0.3% to 1,817.12 USD/oz, after touching the lowest level since Jan. 31 at 1,786.60 USD/oz. Gold futures added 0.3% to $1,814 an ounce.

Bob Haberkorn, Senior Market Strategist at RJO Futures, believes that gold's slight uptrend is due to lower US government bond yields and a slight drop in the dollar; at the same time, think that the general trend of the USD is still high because the US Federal Reserve (Fed) is strongly raising interest rates.

The dollar index weakened, but remained hovering near a two-decade high, making gold more expensive for foreign buyers.

Although gold is seen as a hedge against inflation, higher interest rates to curb inflation will reduce the attractiveness of gold, which does not yield yields.

“Many people still see gold as undervalued and are even more willing to buy the precious metal when prices decline,” said Fawad Razaqzada, Market Analyst at City Index.

Gold rose on Tuesday morning in Asia, even as the dollar slowly resumed its uptrend and US Treasury yields continued to rise.

Gold futures were up 0.48% to $1,882.65 by 12:36 a.m. ET (4:36 a.m. GMT). The dollar, which usually moves inversely with gold, inched up on Tuesday after falling from a near 20-year high on Monday.

The Chinese yuan, which has been on a recent downtrend, found a floor as investors reduced bets on rising US interest rates would boost the greenback further. Yields on 10-year Treasury notes also rose.

Asian shares were mostly higher on Tuesday and the Reserve Bank of Australia released the minutes of its latest policy meeting earlier in the day. The G-7 central bank and finance ministers will meet at a later date.

Investors also await speech from Fed Chairman Jerome Powell and other Fed policymakers later in the day, with Philadelphia Fed President Patrick Harker speaking a day later.

In other precious metals, silver was down 0.2%, platinum was flat at $945.76 and palladium was down 1.2%.

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