Gold price inches higher as US yields retreat
Gold prices inched higher on Wednesday as US Treasury yield retreated from a session high while the dollar hovers near a two-week peak.
Spot gold saw a slight gain of 0.2% to $1,783.87 per ounce by 1 p.m. ET. US gold futures rose 0.4% to $1,783.90 per ounce in New York.
“Treasuries are coming in line a little bit so you’re getting a bounce in gold,” Bob Haberkorn, senior market strategist at RJO Futures, told Reuters.
Higher yields threaten gold’s appeal as an inflation hedge as they increase the opportunity cost of holding bullion, which pays no interest.
On Wednesday, US Treasury Secretary Janet Yellen initially said rate increases may be needed to stop the economy overheating as President Joe Biden’s spending plans boost growth, but later downplayed the remarks and said she saw no inflation problem brewing, the Financial Post reported.
”Gold market is kind of discounting what Janet Yellen said yesterday, and seeing the fact that the Fed probably isn’t in a position to raise rates at this point,” Haberkorn said, adding however the Treasury Secretary’s statement on rates “threw some shade on the market.”
Elsewhere, palladium fell 0.4% to $2,975.45 per ounce after hitting an all-time high of $3,017.18 in the previous session, driven by concerns of a shortage of the metal.
