PRECIOUS-Gold sags on strong U.S. bond yields, firmer dollar
Published by
ScrapPrices
Published on February 17,2021 08:00 AM Metal Exchange
Gold slipped to its lowest in over two months on Wednesday as surging U.S. Treasury yields and a firmer dollar continued to take a toll on the metal. Spot gold was down 0.2% at $1,790.90 per ounce by 1244 GMT, having hit its lowest since Dec. 1 at $1,782.40 earlier in the day after dropping 1.3% in the previous session.
PRECIOUS-Gold sags on strong U.S. bond yields, firmer dollar

Feb 17 (Reuters) - Gold slipped to its lowest in over two months on Wednesday as surging U.S. Treasury yields and a firmer dollar continued to take a toll on the metal. Spot gold was down 0.2% at $1,790.90 per ounce by 1244 GMT, having hit its lowest since Dec. 1 at $1,782.40 earlier in the day after dropping 1.3% in the previous session.

U.S. gold futures fell 0.5% to $1,789.70. "Gold markets seem to be fixated on U.S. yields," Natixis analyst Bernard Dahdah said. "While there is an amazing amount of liquidity, we are going out of lockdowns and we are expecting growth to go back to normal levels," he added, noting that given such optimism investors had little interest in the safe-haven metal.

Growing expectations for inflation spurred benchmark U.S. Treasury yields to their highest since late February 2020. The surge in yields in turn prompted the dollar to rebound from a three-week low, further pressuring gold. Breakeven inflation , a measure of expected inflation, is at its highest since August 2014 at 2.2%. While gold is seen as an inflation hedge, higher inflation expectations have pushed yields up, increasing the opportunity cost of holding non-yielding gold.

Progress on a $1.9 trillion U.S coronavirus relief plan, as President Joe Biden built support for the bill that includes $1,400 stimulus checks, further drove yields up. But gold could come back into favour once other currencies start to outperform the U.S. dollar later this year, said OANDA analyst Craig Erlam, adding that the metal could scale the levels seen in November, December and January, when it pushed above $1,900.

Investors are also looking forward to the minutes of the Federal Reserve's end-January monetary policy meeting due on Wednesday.

Platinum , used in catalytic converters for vehicles, fell 2.5% to $1,230.36, well below Tuesday's high of $1,336.50, a peak since September 2014. Palladium declined 0.8% to $2,364.03, while silver eased 0.3% to $27.14.

MORE METAL EXCHANGE NEWS
February 17,2021 08:00 AM
Gold slipped to its lowest in over two months on Wednesday as surging U.S. Treasury yields and a firmer dollar continued to take a toll on the metal. Spot gold was down 0.2% at $1,790.90 per ounce by 1244 GMT, having hit its lowest since Dec. 1 at $1,782.40 earlier in the day after dropping 1.3% in the previous session.
February 15,2021 09:00 AM
Benchmark copper leapt to its highest level in more than eight years on Monday, building on last week's solid gains driven by expectations of stronger demand and tight supply.
February 10,2021 08:00 AM
Platinum raced to a six-year peak while palladium jumped over 3% on Wednesday on hopes of a fillip to demand from the automobile sector as the economy recovers, with supply likely to remain strained.