Gold falls as US Treasury yields firm; all eyes on Fed rate decision

[BENGALURU] Gold prices fell on Wednesday, pulled down by firmer US Treasury yields with investors looking out for policy cues from the Federal Reserve's meeting, while palladium eased after hitting a record peak in the previous session.

Spot gold was down 0.5 per cent at US$1,767.76 per ounce by 1.31am GMT. US gold futures were down 0.5 per cent at US$1,770.00 per ounce.

Palladium fell 0.6 per cent to US$2,924.12 per ounce, after hitting an all-time high of US$2,962.50 on Tuesday.

Benchmark US 10-year Treasury yields rose to their highest since April 15, increasing the opportunity cost of holding non-yielding bullion.

The dollar index rose 0.1 per cent against its rivals, making gold less appealing for other currency holders.

Market participants awaited the US Fed's statement due later in the day, for cues on the central bank's monetary policy.

Japanese retail sales rose at the fastest pace in five months in March as consumer demand recovered from the huge hit it took from the Covid-19 pandemic last year.

US consumer confidence jumped to a 14-month high in April as increased vaccinations against Covid-19 and additional fiscal stimulus allowed for more services businesses to reopen, boosting demand and hiring by companies.

Analysts and traders have slashed their gold price forecasts, with many believing a return to last year's record highs is unlikely as economic recovery tarnishes the safe-haven metal's appeal, a Reuters poll showed on Tuesday.

Senior US officials on Tuesday pledged sustained support for India in helping it deal with the world's worst current surge of Covid-19 infections.

Silver fell 0.9 per cent to US$26.00 per ounce. Platinum was down 1 per cent at US$1,216.75.

REUTERS