Picture: REUTERS
Picture: REUTERS

Bengaluru — Gold steadied on Tuesday, but was hovering near a five-week low touched in the previous session, as rising US treasury yields boosted the dollar.

Spot gold crept up 0.2% to $1,288.87/oz as of 3.36am GMT, after slipping to $1,282.50 in the previous session, its lowest since January 25.

US gold futures were also up 0.2% at $1,290.20/oz.

The dollar, against a group of six major currencies, was trading close to its two-week high of 96.816 posted in the previous session.

The US currency has enjoyed some support from higher US treasury yields as data, including fourth-quarter GDP, eased fears of a potentially rapid loss in economic momentum.

“People are more comfortable in moving out of safe-haven assets and gold is coming under pressure from that,” said Jeffrey Halley, Senior Market Analyst at Oanda.

“A lot of money was parked in gold at the start of the year, waiting for clarity on tariffs. Now that we are seeing little bit of optimism on the tariffs that is sort of undermining pillars for buying gold,” Halley said, adding that if yields continued to rise, that would further pressure gold.

US secretary of state Mike Pompeo said on Monday he thought the US and China were “on the cusp” of a deal to end their trade war.

However, a slight slip in the Asian equity market triggered by a cut in China’s economic growth target supported gold prices on Tuesday.

China cut its growth target for this year to 6%-6.5%, in line with expectations, from around 6.5% in 2018.

“Concerning that global economic growth slowed down, while central banks turned more dovish on monetary policy, we are not being pessimistic about gold market,” gold dealer Wing Fung said in a research note.

Gold may fall to $1,271/oz, as it has broken a support at $1,289, according to Reuters analyst Wang Tao.

Tracking bullion prices, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.76% on Monday from Friday. Holdings have fallen over 2% so far 2019.

Among the other precious metals, spot silver gained 0.5% to $15.15/oz.

Palladium slipped 0.1% to $1,531.89/oz, while platinum was 0.7% higher at $840.27/oz.