Gold prices flat as rise in US bond yields weighs

GOLD prices were nearly flat on Tuesday (Jun 28), as recent gains in Treasury yields prevented any significant interest in bullion.

Spot gold was last up 0.1 per cent at S$1,824.65 per ounce by 12.56 am GMT. US gold futures were flat at S$1,824.70.

A move by Britain, the United States, Japan and Canada to ban new imports of Russian gold is being seen as largely symbolic within the global bullion market, as Russian exports to the West have already dried up.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.44 per cent to 1,056.40 tonnes on Monday from 1,061.04 tonnes a day earlier.

China's net gold imports through Hong Kong jumped 58.3 per cent in May from the previous month, Hong Kong' official data showed on Monday, as pandemic-related curbs were relaxed in major cities.

The US dollar struggled against its major rivals on Monday as softening inflation expectations prompted a reassessment of the prospects for aggressive interest rate hikes but volatile markets cushioned a broader decline.

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A weaker dollar makes gold more attractive for buyers holding other currencies.

Although gold is considered an inflation hedge by many, higher interest rates and bond yields raise the opportunity cost of holding bullion, which yields no interest.

Benchmark US 10-year Treasury yields steadied after gains in the previous session, limiting demand for gold.

New orders for US-made capital goods and shipments increased solidly in May, pointing to sustained strength in business spending on equipment in the second quarter, but rising interest rates and tighter financial conditions could slow momentum.

Spot silver dipped 0.1 per cent to S$21.13 per ounce, and platinum eased 0.1 per cent to S$907.38, while palladium rose 0.4 per cent to S$1,878.18. REUTERS