Gold prices steady as easing Treasury yields lift appeal

GOLD held its ground on Thursday (Jun 2), supported by lower US Treasury yields, after mounting concerns over stubborn inflation worldwide helped prices rebound from their lowest level in 2 weeks in the previous session.

Spot gold was steady at US$1,847.49 per ounce, as of 12.36 am GMT. US gold futures were up 0.2 per cent to US$1,851.40.

Benchmark US 10-year Treasury yields dipped, lifting the appeal of zero-yield gold.

Gold prices recovered on Wednesday from their lowest level since May 19 as investors looked towards safe-haven bullion amid broadening inflationary pressures.

Although the dollar strengthened amid upbeat US economic data, making bullion less attractive for overseas buyers.

The US Federal Reserve should get interest rates up to a level that no longer stimulates the economy as quickly as possible including 50-basis-point hikes at the central bank's next 2 meetings, San Francisco Federal Reserve Bank President Mary Daly said on Wednesday.

US job openings fell in April, but remained at significantly high levels, suggesting that wages would continue to rise as companies scramble for workers, and contribute to inflation staying uncomfortably high for a while.

Bullion is considered a hedge against inflation and a safe haven during times of political and economic uncertainty.

However, higher short-term US interest rates increase the opportunity cost of holding gold, which bears no interest.

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Gold hits near 2-week low as US bond yields, dollar firm

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.1 per cent to 1,067.20 tonnes on Wednesday from 1,068.36 tonnes on Tuesday.

Spot silver was flat at US$21.80 per ounce, while platinum fell 0.7 per cent to US$990.00, and palladium rose 0.4 per cent to US$2,005.50. REUTERS