Dip in treasury yields boosts gold as US jobs data comes into focus
Continued pushback by US Federal Reserve is good for the bullion, analyst says
Bengaluru — Gold prices edged higher on Thursday as a dip in US treasury yields offset pressure from a stronger dollar, while investors awaited US non-farm payrolls data for April due later this week.
Spot gold was up 0.2% at $1,789.53 per ounce by 5.22am. US gold futures rose 0.3% to $1,788.60 per ounce.
“The US Federal Reserve is continuing to push back here. It is good for gold because it’s keeping yields lower. I think this will eventually lead to a weaker US dollar,” said Stephen Innes, managing partner at SPI Asset Management.
“A test of $1,800 is expected sooner rather than later the way this market is marching on to the beat of a very dovish Fed.”
Benchmark US 10-year Treasury yields hovered close to a one-week low hit on Tuesday, reducing the opportunity cost of holding non-interest bearing gold.
The dollar index rose 0.1% against its rivals, hovering close to a two-week high hit on Wednesday.
Focus now shifts to Friday’s US monthly jobs report, which is expected to show non-farm-payrolls increased by 978,000 last month.
The US economy may be growing more quickly and unemployment falling faster than the core of Fed policymakers projected in March, Fed governor Michelle Bowman said on Wednesday.
However, Chicago Fed president Charles Evans reiterated his worries about reaching the 2% inflation goal and said he expects monetary policy to stay accommodative for some time.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
Elsewhere, palladium was little changed at $2,971.94 per ounce, after scaling an all-time high of $3,017.18 on Tuesday on supply shortfalls.
Silver was steady at $26.51 per ounce, while platinum dipped 0.5% to $1,219.04.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.