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Gold prices edge up on short-covering

Reuters  |  BENGALURU 

By Apeksha Nair

BENGALURU (Reuters) - Gold prices recovered slightly on Wednesday on short-covering after sliding to the lowest level this year in the previous session on surging U.S. bond yields and a stronger dollar.

Spot gold rose 0.3 percent to $1,293.89 per ounce at 0330 GMT, after shedding 1.7 percent and marking the lowest this year at $1,288.31 in the previous session.

This was also the lowest price level for the yellow since Dec. 28.

U.S. gold futures for June delivery were up 0.2 percent at $1,293.30 per ounce.

"Rising U.S. bond yields and a stronger dollar were factors behind gold's decline below the $1,300 level. The slight pick up suggests that there might have been some opportunistic buying on the part of investors," said John Sharma, an with

A stronger dollar makes greenback-denominated gold more expensive for holders of other currencies, while rising U.S. yields tend to weigh on bullion's non-yielding appeal.

The dollar on Wednesday hovered near a five-month high against a group of major currencies, boosted by a surge in the benchmark 10-year Treasury yield after strong U.S. on Tuesday.

Meanwhile, Asian shares were under pressure after cancelled high-level talks with Seoul, denouncing military exercises between and the and throwing into question next month's unprecedented summit between and U.S.

While global political tensions continued to provide safe-haven support to the metal, investors said the main price drivers would likely remain a stronger dollar and rising U.S. interest rates.

"There are lot of geopolitical risks but people are just used to it. Therefore it has not become a big for gold," said Helen Lau, at

Higher interest rates in the amid a rising dollar will continue to add downward pressure on gold, Lau said.

Spot gold may bounce to a resistance at $1,302 per ounce, before falling again, said.

In other precious metals, silver was up 0.4 percent at $16.29 per ounce after falling about 1.6 percent on Tuesday in its biggest one-day percentage decline since April 23. rose 0.3 percent to $895.74 an ounce, while palladium eased 0.1 percent to $981.50 per ounce after recording the biggest single-day percentage loss in two weeks at 1.3 percent in the previous session.

(Reporting by and in Bengaluru; Editing by Sunil Nair)

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

First Published: Wed, May 16 2018. 09:30 IST
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