Gold climbs 4-week peak as US Treasury yields, dollar fall

GOLD hit a 4-week high on Tuesday (Aug 2), as a weaker dollar and a dip in US Treasury yields boosted demand for the safe-haven metal amid mounting worries over an economic slowdown.

Spot gold was up 0.4 per cent at US$1,778.69 per ounce, as of 12.44 am GMT, its highest since Jul 5.

US gold futures gained 0.2 per cent to US$1,791.10 per ounce.

The dollar fell 0.2 per cent to a near 1-month low against its rivals, making greenback-denominated gold less expensive for other currency holders.

Benchmark US 10-year Treasury yields dropped to a 4-month low, reducing the opportunity cost of holding non-interest bearing gold.

Data showed US manufacturing activity slowed less than expected in July, with the Institute for Supply Management's (ISM) index of national factory activity dipping to 52.8 last month, its lowest reading since June 2020.

US construction spending also fell 1.1 per cent in June, as outlays on single-family homebuilding declined sharply amid rising mortgage rates.

These weak US economic readings pointed to a slowdown that could prompt the Federal Reserve to be less aggressive in its monetary policy tightening plans.

Wall Street ended a 3-day winning streak and crude prices plunged on Monday as economic data from the US, Europe and China showed demand weakening under inflation pressures.

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China's UN Ambassador Zhang Jun said a visit by US House of Representatives Speaker Nancy Pelosi to Taiwan would undermine the Sino-US relationship. Pelosi was set to visit Taiwan on Tuesday, 3 sources said.

Spot silver fell 0.5 per cent to US$20.22 per ounce, platinum was down 0.5 per cent at US$892.83, and palladium eased 0.2 per cent to US$2,124.74. REUTERS