Gains in PRECIOUS GOLD due to low bond yields

Gains in PRECIOUS GOLD due to low bond yields

On Thursday, gold prices rose as a drop in US treasury yields countered the impact of a stronger dollar, while investors awaited the release of April non-farm payrolls data later this week.

Spot gold was up 0.2% at $1,789.53 per ounce by 0322 GMT. U.S. gold futures rose 0.3% to $1,788.60 per ounce.

“The U.S. Federal Reserve is continuing to push back here, it is good for gold because it’s keeping yields lower. I think this will eventually lead to a weaker U.S. dollar,” said Stephen Innes, managing partner at SPI Asset Management.

The yield on the benchmark U.S. 10-year Treasury yields hovered near a one-week low hit on Tuesday, reducing the opportunity cost of holding noninterest-bearing gold.

Meanwhile, the dollar index rose 0.1% against other currencies and hovered near a two-week high hit on Wednesday.

The opportunity cost of owning non-yielding bullion decreases as interest rates fall.

Elsewhere, palladium was little changed at $2,971.94 per ounce, after scaling an all-time high of $3,017.18 on Tuesday on supply shortfalls.

Silver was steady at $26.51 per ounce, while platinum dipped 0.5% to $1,219.04.

Damon Harrison
Market Analyst, IPG Group