Gold falls as the dollar strengthens and Treasury yields rise.

Gold falls as the dollar strengthens and Treasury yields rise.

Gold fell on Wednesday as a stronger dollar and a rebound in U.S. Treasury yields kept money from flowing into safe-haven bullion. 

Fundamentals

Spot gold was down 0.1% at $1,808.45 per ounce at 0035 GMT.

U.S. gold futures fell 0.1% to $1,808.90 per ounce.

The rebound in 10-year Treasury yields from five-month lows has increased the opportunity cost of holding non-interest-bearing gold.

The dollar, which is also considered a safe bet in times of geopolitical uncertainty, is trading near a 3-1/2-month high against other currencies, which could make gold more expensive for holders of other currencies, reducing demand for bullion.

Following a multi-day losing streak fueled by an increase in worldwide coronavirus cases and growing deaths in the United States, Wall Street bounced back on Tuesday as good earnings reports and renewed economic optimism boosted appetite for risk.

Russia’s central bank said the country’s gold reserves stood at 73.7 million troy ounces at the start of July.

Silver was steady at $24.92 per ounce, palladium rose 0.2% to $2,637.68 per ounce and platinum rose 0.3% to $1,069.49.

Damon Harrison
Market Analyst, IPG Group