- ALSO READ
By Brijesh Patel
(Reuters) - Gold pared some losses after dipping more than 1% earlier on Wednesday, helped by dovish comments from Federal Reserve Chair Jerome Powell, but bullion struggled for traction as elevated U.S. Treasury yields dampened its allure as an inflation hedge.
Spot gold was down 0.4% at $1,798.10 per ounce by 02:30 p.m. EST (1930 GMT), after dropping as much as 1.2% earlier in the session.
U.S. gold futures settled down 0.4% at $1,797.90.
"Rising bond yields continue to weigh on the gold market. Gold has not found any path to a sustainable recovery even with talks about additional stimulus measures," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
U.S. benchmark 10-year Treasury yields touched 1.4% for first time since February 2020. Rising yields tend to hurt bullion's appeal as an inflation hedge since they increase the opportunity cost of holding the metal.
Powell on Wednesday reiterated that U.S. interest rates will remain low and the Fed will keep buying bonds to support the U.S. economy.
In his testimony before the U.S. Senate on Tuesday, Powell said monetary policy still needed to be accommodative, with economic recovery "uneven and far from complete."
"Over the last two days a very dovish and hence risk-friendly Powell has cheered the stock market which is bearish for USD and as such has given gold a little breathing space," said Tai Wong, a trader at investment bank BMO in New York.
The dollar index was hovering near a more than one-month low against its rivals.
Investors kept a close watch on developments over a $1.9 trillion U.S. coronavirus relief package, which could contribute to a speedy economic recovery but at the cost of rising inflation.
Elsewhere, silver rose 0.7% to $27.82 an ounce, and platinum climbed 1.7% to $1,258.50.
Palladium jumped 3.5% to $2,431.60 an ounce, its highest level since Jan. 15.
(Reporting by Brijesh Patel in Bengaluru; Editing by Jonathan Oatis, Matthew Lewis and Hugh Lawson)
(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.)
Subscribe to Business Standard Premium
Exclusive Stories, Curated Newsletters, 26 years of Archives, E-paper, and more!
First Published: Thu, February 25 2021. 03:40 IST