Gold slides 2% to near three-week trough as U.S. yields surge
By Shreyansi Singh (Reuters) - Gold prices slipped nearly 2% on Tuesday as a firmer dollar, higher Treasury yields and hopes for a faster U.S.
By Shreyansi Singh
(Reuters) - Gold prices slipped nearly 2% on Tuesday as a firmer dollar, higher Treasury yields and hopes for a faster U.S. economic recovery dampened demand for safe-haven bullion.
Spot gold slid 1.6% to $1,685.43 per ounce by 12:44 p.m EDT (1644 GMT). Earlier in the session, bullion fell about 2% to its lowest since March 8 at $1,678.40. U.S. gold futures fell 1.7% to $1,685.10.
Benchmark U.S. 10-year Treasury yields rose to a 14-month peak, bolstered by hopes of stronger growth and inflation ahead of U.S. President Joe Biden's multitrillion-dollar infrastructure plan.
"The short-term drivers just appear to be becoming very bearish for gold," said Edward Moya, senior market analyst at OANDA, pinning gold's recent weakness on a firmer dollar and higher yields.
While gold is likely to see some pressure in the short-term, investors pricing in inflationary concerns could "eventually trigger a frenzy of gold buying," Moya added.
The dollar index jumped to a more than four-month high, making greenback-denominated gold more expensive for holders of other currencies.
Higher U.S. Treasury yields have threatened gold's appeal as an inflation hedge as they increase the opportunity cost of holding bullion, which pays no interest.
"From a technical point of view, the (gold) price is playing with the key level of $1,700. A crucial support is placed at $1,670, a recent low, while the overall scenario for gold remains moderately bearish," ActivTrades chief analyst Carlo Alberto De Casa said in a note.
Elsewhere, silver fell 2.4% to $24.07 an ounce and platinum was down 1.7% to $1,156.00.
Expectations of a continued supply shortfall amid higher demand for the autocatalyst metal are driving palladium prices up, analysts said.
Palladium gained 1.4% to $2,564.43, having earlier risen over 3% after sliding 5.5% in the previous session.
(Reporting by Shreyansi Singh and Asha Sistla in Bengaluru; additional reporting by Nakul Iyer; Editing by Marguerita Choy and Richard Chang)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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