Gold eases on firmer dollar, yields; all eyes on US inflation data

[BENGALURU] Gold prices fell on Wednesday, as a rise in US Treasury yields and a firmer dollar dented the metal's safe-haven appeal, while investors awaited US consumer price index data due later in the day.

Spot gold was down 0.2 per cent at US$1,832.73 per ounce by 1.09am GMT.

US gold futures eased 0.1 per cent to US$1,834.30.

The dollar index was up 0.1 per cent, making gold more expensive for other currency holders.

The US currency slipped to a more than two-month low in the previous session after worries about rising inflation threatened to erode its value.

Benchmark US 10-year Treasury yields hit their highest in more than a week. Higher bond yields raise the opportunity cost of holding non-yielding gold.

Federal Reserve officials grappled on Tuesday with April's surprisingly weak employment growth, maintaining faith in the US economic rebound but acknowledging the pace of the jobs recovery may prove choppier than anticipated.

Market participants awaited the release of US consumer price data due 12.30pm GMT on Wednesday for further cues on the Fed's stance on inflation.

US job openings surged to a record high in March, further evidence that a shortage of workers was hampering job growth, even as nearly 10 million Americans are looking for employment.

Asian shares languished near one-month lows.

South Korea's unemployment rate fell to an eight-month low in April, while the number of people employed rose at the sharpest pace in nearly seven years as the economic recovery continues.

Palladium rose 0.2 per cent to US$2,942.67 per ounce.

Silver fell 0.6 per cent to US$27.47 per ounce, while platinum slipped 0.5 per cent to US$1,228.68.

REUTERS