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Gold slips to 2-week low as rising bond yields support US dollar

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Gold prices slipped to their lowest level in nearly two weeks on Monday as the dollar remained supported on the back of rising US Treasury yields.

[BENGALURU] Gold prices slipped to their lowest level in nearly two weeks on Monday as the dollar remained supported on the back of rising US Treasury yields.

Spot gold was down 0.1 per cent at US$1,333.20 per ounce at 0051 GMT, after earlier touching its lowest since April 10 at US$1,331.70.

US gold futures fell 0.2 per cent to US$1,335.50 per ounce.

The dollar index, which measures the greenback against a basket of currencies, was up about 0.1 per cent at 90.392.

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Yields on benchmark 10-year Treasuries climbed to the highest level since Jan 2014 on Friday.

As the gap between short- and long-term borrowing costs hovers near its lowest in more than 10 years, speculation has risen over whether the so-called yield curve is signalling that a recession could be around the corner.

Federal Reserve Governor Lael Brainard on Friday said the US economy appears capable of handling further interest-rate increases in the near future.

US interest rates futures fell on Friday as traders bet on a greater likelihood the Federal Reserve would raise key short-term borrowing costs three more times in 2018 in the wake of data that showed steady US economic growth.

US President Donald Trump said on Sunday the North Korean nuclear crisis was a long way from being resolved, striking a cautious note a day after the North's pledge to end its nuclear tests raised hopes before planned summits with South Korea and the United States.

Hedge funds and money managers raised their net long positions in COMEX gold contracts in the week to April 17, US data showed on Friday.

A recent string of sluggish euro zone data is not signalling a fundamental break in the bloc's growth path and is not expected to impact the European Central Bank's plans to normalise policy, three sources with direct knowledge of the bank's thinking said.

Russia's gold reserves stood at 60.8 million troy ounces as of the start of April,the central bank said on Friday.

REUTERS

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