Gold stands firm despite surge in US bond yields
GOLD prices firmed above recent lows on Tuesday (Aug 22), with the non-yielding asset holding ground despite US Treasury yields powering to nearly 16-year highs as investors look ahead to central bankers’ meeting this week for clues on interest rates.
Spot gold held its ground at US$1,894.91 per ounce by 0117 GMT, hovering above a five-month low of US$1,883.70 hit last week. US gold futures added 0.1 per cent to US$1,923.90.
Gold on Monday settled about 0.3 per cent higher, reporting its best day in more than two weeks after five consecutive sessions of losses.
The yield on 10-year Treasury notes hit highs last seen during the Great Financial Crisis in November 2007 as a resilient US economy boosted view the Federal Reserve will keep interest rates higher for longer.
For an outlook on interest rates, comments from Fed chair Jerome Powell on Friday will be monitored at a meeting of central bankers at Jackson Hole, Wyoming. Higher rates increase bond yields, making non-yielding bullion less attractive.
American workers’ expectations for pay surged in July, even as those same workers foresee a modestly less robust job market, said a survey released on Monday by the New York Fed.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Cracks are forming in a global stocks rally, with surging bond yields, rising energy prices and intensified worries over China’s economy among the factors sapping investors’ risk appetite following months of gains in equity markets.
Receding fears of a US slowdown and surging bond yields have gradually eroded the appeal of exchange-traded funds (ETF) backed by traditional safe-haven gold this year, despite sticky inflation.
SPDR Gold Trust, the world’s largest gold-backed ETF, said its holdings fell 0.10 per cent on Monday.
In other metals, spot silver fell 0.2 per cent to US$23.30 per ounce and platinum was up 0.1 per cent at US$909.72. Palladium steadied at US$1,245.53. REUTERS
Share with us your feedback on BT's products and services
