Gold at five-month trough as US dollar, yields rise

GOLD prices touched five-month lows on Thursday (Aug 17), as the US dollar and Treasury yields gained momentum after recent upbeat economic data added weight to expectations the Federal Reserve would carry on with its policy tightening.

Spot gold was subdued at US$1,891.70 per ounce by 0141 GMT, dropping to its weakest level since Mar 15. US gold futures shed 0.3 per cent to US$1,921.80.

Minutes from the Fed’s July meeting showed “most” policymakers continued to prioritise the battle against inflation, while “some participants” cited risks to the economy of pushing rates too far.

Benchmark 10-year US Treasury yields hit a 10-month high, boosting the US dollar to its highest level since mid-June and drawing investors away from non-interest-bearing gold.

US single-family homebuilding surged in July, in another sign of the economy continuing to defy dire forecasts of a recession.

China will strengthen the coordination of various policies to boost growth and meet this year’s economic target, according to a Cabinet meeting cited by state media on Wednesday.

Missed payments on investment products by a leading Chinese trust firm and a fall in home prices have added to worries that China’s deepening property sector crisis is stifling what little momentum the economy has left.

The eurozone’s vast industrial sector rebounded in June, giving overall growth a small boost to end an otherwise weak quarter on a positive note.

Worries about persistently high inflation in Britain grew as key measures of price growth monitored by the Bank of England failed to ease in July, despite a sharp drop in the headline inflation rate.

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Gold languishes as strong US data stokes Federal Reserve rate hike woes

Spot silver was up 0.2 per cent at US$22.42 an ounce and platinum steady at US$882.50, having touched its lowest since October. Palladium fell 0.3 per cent to US$1,205.70. REUTERS