Picture: DARIO HAYASHI
Picture: DARIO HAYASHI

Bengaluru — Gold prices dipped on Wednesday, as elevated treasury yields and an uptick in risk appetite weighed on the safe-haven metal, while investors awaited US jobs data due this week for cues on economic recovery and near-term Federal Reserve policy action.

Spot gold was down 0.2% at $1,897.36/oz, at 3.11am GMT, after hitting its highest since January 8 at $1,916.40 on Tuesday.

US gold futures eased 0.2% to $1,900.40/oz.

“We saw some decent profit-taking as rising yields have sort of dulled the appeal for gold, primarily triggered after the US manufacturing survey data topped estimates,” Stephen Innes, managing partner at SPI Asset Management, said.

“There are some jitters, especially ahead of nonfarm payroll. However, all inflation signals remain favourable for gold over the long term.”

The US 10-year treasury yield held firm above 1.6% after hitting a more than one-week high, increasing the opportunity cost of holding non-interest-bearing gold.

Data on Tuesday showed that US manufacturing activity picked up in May as pent-up demand in a reopening economy boosted orders.

Strong data also helped lift risk sentiment in wider financial markets, denting the demand for safe-haven assets such as gold.

Market participants’ focus this week will be on US payrolls data due on Friday that can shed more light on global economic recovery.

“As for the precious metals’ outlook in the short term, it depends on how global inflation data develops and how central banks, mostly the Fed, respond to it,” IG Market analyst Kyle Rodda said.

Gold, often used as a hedge against inflation, registered in May its best month in 10, driven by weaker dollar and recent data showing a rise in prices in the US and Britain.

Elsewhere, palladium fell 0.2% to $2,853.64/oz, silver fell 0.5% to $27.77, and platinum slipped 0.5% to $1,186.50.


Reuters

subscribe

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.