You are here: Home » Reuters » News
Business Standard

Gold dips as dollar firms, yields rise

Reuters  |  LONDON 

By Maytaal Angel

LONDON (Reuters) - Gold dipped on Tuesday, heading for a third straight day of losses as a rise in U.S. borrowing costs supported the dollar and overshadowed the impact of strife in

Israeli troops shot dead dozens of Palestinian protesters on the border on Monday when the high-profile opening of the to in by the raised tension to boiling point.

But gold investors were fixated on the dollar, which rose versus a currency basket as 10-year U.S. bond yields shot above 3 percent, sending borrowing costs higher in a number of other countries.

"The market is getting increasingly disappointed about (gold's) inability to react to those (geopolitical) drivers," said Ole Hansen, at Saxo

"We're up against bond yields, the dollar and the fact that rising have at this stage accelerated expectations for rate hikes in the United States, due to the risk of inflation."

Spot gold had dipped 0.2 percent to $1,309.99 per ounce by 0949 GMT.

U.S. gold futures for June delivery fell 0.6 percent to $1,309.70 per ounce.

A Federal Reserve this week backed the case for further interest rate hikes in the United States, saying inflation had not yet reached the U.S. central bank's 2 percent goal in a sustained way.

Higher U.S. interest rates tend to boost the dollar and push up bond yields, making greenback-denominated gold more expensive for holders of other currencies and denting the appeal of non-yielding assets such as gold.

"The market's been waiting for the next rate hike by the Fed ... and I think gold prices are going to remain under pressure till we get through that hike," said in a note.

"We're seeing little sparks of interest on the back of (rising geopolitical tensions) but at the moment it doesn't look significant enough to raise concerns over the medium term, which support a more sustained level of safe-haven buying."

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.17 percent to 856.17 tonnes on Monday.

Spot gold may retest support at $1,302 per ounce, said.

was down 0.4 percent at $16.43 per ounce.

Platinum was up 0.1 percent at $904 per ounce, while palladium fell 2 percent to $975.72 an ounce, after dropping to a more than one-week low at $964.

said on Tuesday it would examine whether a takeover of by South Africa's Sibanye-Stillwater would lessen competition.

(Additional reporting by Apeksha Nair; Editing by Dale Hudson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 15 2018. 19:03 IST
RECOMMENDED FOR YOU