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Picture: 123RF/RONNARONG THANUTHATTAPHONG
Picture: 123RF/RONNARONG THANUTHATTAPHONG

Bengaluru — Gold hit its lowest in nearly two weeks on Wednesday, though prices were confined to a tight range as safe-haven demand for bullion helped offset some sustained pressure from a firmer dollar and elevated US treasury yields.

A stronger dollar makes bullion more expensive for buyers holding other currencies, while gains in benchmark US 10-year treasury yields reduce the appeal of zero-yield gold. Spot gold was flat at $1,835.28 an ounce at 2.16am GMT, after hitting its lowest since May 20 at $1,832.41 earlier in the session. US gold futures fell 0.6% to $1,838.20.

The outlook for interest rates and the dollar, and geopolitical concerns are important factors for gold, and “those competing interests are holding gold in a vice,” said Michael McCarthy, chief strategy officer at Tiger Brokers Australia.

US President Joe Biden on Tuesday met with Federal Reserve chair Jerome Powell to discuss historic inflation that's draining American wallets, even as he assured the central bank chief he would have freedom from political interference.

Bullion is considered a hedge against inflation and as a safe-haven asset during times of political uncertainty, but the Fed hiking short-term US interest rates to fight rising costs raises the opportunity cost of holding gold.

Russian troops fought to take complete control of the eastern industrial city of Sievierodonetsk on Wednesday as the US said it will provide Ukraine with advanced rockets to help it force Moscow to negotiate an end to the war.

Upward momentum in gold from the move higher on May 19 has petered out, McCarthy said, adding a break through $1,830 an ounce could see a test of levels just below $1,800, and on the upside prices would need a move through $1,870 to break the current sideways range.

Spot silver was flat at $21.53 an ounce, while platinum gained 0.2% to $966.68 and palladium firmed 0.1% to $2,000.81.

Reuters

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