Gold prices hold ground as US bond yields slide

GOLD prices firmed on Tuesday (May 10) as a decline in US Treasury yields offset pressure on greenback-priced bullion from sustained strength in the dollar.

Spot gold was up about 0.1 per cent at US$1,854.91 per ounce, as of 12.55 am GMT. US gold futures were down 0.2 per cent at US$1,854.10.

Benchmark 10-year US Treasury yields extended declines on Tuesday after pulling back from their highest level in 3-1/2 years in the previous session, buoying prices of zero-yield gold.

The dollar held steady near a fresh 20-year high scaled on Monday on risk-off sentiment stemming in part from concerns over the US Federal Reserve's ability to combat high inflation boosted the greenback's safe-haven appeal.

This made greenback-priced and rival safe-haven bullion less attractive for other currency holders and continued to restrain gold prices after pushing them 1 per cent lower in the previous session.

Atlanta Federal Reserve president Raphael Bostic on Monday said he expects the US central bank to deliver 2 or 3 more half-percentage-point interest rate hikes but won't need to use anything bigger, noting some hopeful signs on inflation.

SEE ALSO

Gold prices dip on firm US bond yields, dollar

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

While gold is seen as a safe store of value during times of political and economic crises, it is highly sensitive to rising short-term US interest rates and bond yields, which raise the opportunity cost of holding bullion.

Russian President Vladimir Putin exhorted Russians to battle in a defiant Victory Day speech on Monday, but was silent about plans for any escalation in Ukraine, despite Western warnings he might use his Red Square address to order a national mobilisation.

Spot silver slipped 0.1 per cent to US$21.77 per ounce, platinum fell 0.5 per cent to US$951.10, while palladium gained 0.3 per cent to US$2,102.74. REUTERS