You are here: Home » International » News » Markets
Business Standard

Gold prices jump more than 1% as inflation concerns triggers demand

Spot gold was up 1.6% at $1,810.45 an ounce

Gold Prices | Inflation | United States


Photo: Reuters
Photo: Reuters

By Brijesh Patel

(Reuters) - Gold rose more than 1% to a near one-week high on Monday, despite a jump in U.S. Treasury yields, as expectations for rising triggered equity valuation concerns and drove investors towards the safe-haven metal.

Spot gold was up 1.3% at $1,805.45 an ounce by 10:20 a.m. EST (1520 GMT), having hit its highest since Feb. 16 earlier in the session.

U.S. gold futures gained 1.6% to $1,805.10.

"We are seeing investment flows into gold as market participants grow more anxious about rising real rates that can impact equity valuations," said TD Securities commodity strategist Daniel Ghali, pointing to rising Treasury yields.

U.S. benchmark 10-year treasury yields hit a near one-year high, increasing the opportunity cost of holding non-yielding bullion.

However, rising real yields and concerns made equity valuations look more stretched in comparison and prompted investors towards safe-haven assets like gold, which is widely viewed as a hedge against .

"The dollar at the moment is low and that is supporting. Also, the real reason for the to increase in the longer term is the chances of inflation picking up," Commerzbank analyst Eugen Weinberg said.

The dollar index eased 0.1% against its rivals, making gold less expensive for holders of other currencies.

A $1.9 trillion U.S. stimulus package is widely expected to pass by the end of the week, raising hopes of a speedy economic recovery but at the cost of rising inflation.

Investors are also eyeing the testimony of U.S. Federal Reserve Chairman Jerome Powell on the Semiannual Monetary Report to Congress on Tuesday.

The Fed and other leading central banks have pinned their hopes on ultra-low interest rates to get the economy out of the economic fallout from the COVID-19 pandemic.

Elsewhere, silver rose 1.7% to $27.68 an ounce, while platinum eased 0.4% to $1,269.18.

Palladium rose 0.2% to $2,384.09, having earlier hit a more than one-month high at $2,431.50.


(Reporting by Brijesh Patel and Diptendu Lahiri in Bengaluru; Editing by Nick Macfie)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, February 22 2021. 22:31 IST