Finance
By: Shree1news, 13 MAY 2021
Gold touched a one-week low on Thursday, as U.S. Treasury yields rose and the dollar firmed after a bigger-than-expected rise in U.S. consumer prices boosted bets for early rate of interest hikes.
Spot gold was down 0.1% at $1,814.47 per ounce by 1108 GMT, after falling to its lowest since May 6 at $1,811.74 earlier within the session.
US. gold futures fell 0.5% to $1,814.40.
“The real yields continue to rise and there is speculation in the market that there would be a surprise tightening by the Federal Reserve,” said Xiao Fu, head of commodities markets strategy at Bank of China International.
Benchmark U.S. 10-year Treasury yields jumped to their highest in more than a month, whereas the dollar index rose 0.1% versus rivals. Data on Wednesday displaying U.S. consumer prices jumped the most in almost 12 years in April, intensified concerns over rising inflation and possible rate of interest hikes. High rates of interest increase the opportunity cost of holding non-yielding bullion.
However, the Fed has pledged to keep rates of interest low until the economy reaches full employment, and inflation hits 2% and is on track to “moderately” exceed that level for some time. Investor now await the U.S. jobless claims report later within the day and retail sales data on Friday.
“The Fed is probably quite focused on unemployment as a reason for keeping the narrative dovish,” Nicholas Frappell, global general manager at ABC Bullion, mentioned. “Given the Flexible Average Inflation target, there’s awareness that the Fed can allow for some inflationary room.”
Elsewhere, palladium fell 1.8% to $2,805.95 per ounce, extending declines after top producer Nornickel mentioned it resumed full operations at one of its two mines hit by flooding this year. Silver was down 0.8% at $26.81, whereas platinum dropped 0.6% to $1,202.81.
Source:A-N
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