Gold inches to two-and-a-half-year low on stronger dollar, yields
Spot gold was up 0.7% at $1,632.83 per ounce after falling to its lowest since April 2020, while holdings of SPDR Gold Trust have fallen to their lowest since March 2020
27 September 2022 - 12:56
byBrijesh Patel
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Bengaluru — Gold bounced off a two-and-a-half-year low on Tuesday as a slight pullback in the dollar and US treasury yields helped tide over some pressure from prospects of more aggressive US rate hikes.
Spot gold was up 0.7% at $1,632.83 per ounce as of 9.39am GMT, after falling to its lowest since April 2020 at $1,620.20 in the previous session.
US gold futures rose 0.4% to $1,640.50.
“After an explosive start of Monday, US yields and the dollar are slightly paring gains, which is helping to ease the downward pressure on gold prices,” said Craig Erlam, senior market analyst at Oanda.
“[Gold] remains incredibly sensitive to both and we’re seeing a lot of volatility right now as markets increasingly price in much higher rates.”
The dollar index eased off a two-decade peak scaled in the previous session, making gold less expensive for other currency holders.
The benchmark 10-year treasury yield also retreated from a 12-year peak, reducing the opportunity cost of holding non-interest bearing gold.
The Federal Reserve has aggressively raised interest rates since March and has signalled more increases are to come, stoking concerns of a global recession and triggering a sell-off in equity markets.
Gold, traditionally seen as a safe-haven asset, has failed to benefit from the recent rout in equities as investors flocked to the safety of the US currency amid hawkish stance on rates by the Fed.
“Its [gold’s] status as a haven asset in times of economic distress [that] has failed to stem the flow of selling,” analysts at ANZ said in a note.
Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), have fallen to their lowest since March 2020.
Elsewhere, spot silver gained 1.2% to $18.56 per ounce, platinum rose 0.5% to $856.26, while palladium eased 0.2% to $2,041.49.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold inches to two-and-a-half-year low on stronger dollar, yields
Spot gold was up 0.7% at $1,632.83 per ounce after falling to its lowest since April 2020, while holdings of SPDR Gold Trust have fallen to their lowest since March 2020
Bengaluru — Gold bounced off a two-and-a-half-year low on Tuesday as a slight pullback in the dollar and US treasury yields helped tide over some pressure from prospects of more aggressive US rate hikes.
Spot gold was up 0.7% at $1,632.83 per ounce as of 9.39am GMT, after falling to its lowest since April 2020 at $1,620.20 in the previous session.
US gold futures rose 0.4% to $1,640.50.
“After an explosive start of Monday, US yields and the dollar are slightly paring gains, which is helping to ease the downward pressure on gold prices,” said Craig Erlam, senior market analyst at Oanda.
“[Gold] remains incredibly sensitive to both and we’re seeing a lot of volatility right now as markets increasingly price in much higher rates.”
The dollar index eased off a two-decade peak scaled in the previous session, making gold less expensive for other currency holders.
The benchmark 10-year treasury yield also retreated from a 12-year peak, reducing the opportunity cost of holding non-interest bearing gold.
The Federal Reserve has aggressively raised interest rates since March and has signalled more increases are to come, stoking concerns of a global recession and triggering a sell-off in equity markets.
Gold, traditionally seen as a safe-haven asset, has failed to benefit from the recent rout in equities as investors flocked to the safety of the US currency amid hawkish stance on rates by the Fed.
“Its [gold’s] status as a haven asset in times of economic distress [that] has failed to stem the flow of selling,” analysts at ANZ said in a note.
Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), have fallen to their lowest since March 2020.
Elsewhere, spot silver gained 1.2% to $18.56 per ounce, platinum rose 0.5% to $856.26, while palladium eased 0.2% to $2,041.49.
Reuters
Gold firms as dollar softens
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Gold inches lower as dollar climbs higher
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