Gold prices rose on Tuesday, as a
pullback in U.S. Treasury yields added some luster to the metal
after it hit a nine-month low in the previous session.
Spot gold rose 0.4% to $1,688.41 per ounce by 0539
GMT. Prices had fallen more than 1% on Monday to $1,676.10,
their lowest since June 5.
U.S. gold futures climbed 0.5% to $1,686.70.
“Dip buyers have emerged after the 1.15% fall overnight and
U.S. bond yields have slightly eased, which has provided support
for precious metals,” OANDA senior market analyst Jeffrey Halley
“Gold’s short-term technicals have dipped into oversold
territory, which should provide some temporary support over the
session, however gains are likely to be limited to the $1,700
U.S. 10-year Treasury yields edged lower,
raising the appeal of holding gold.
A steady rise in bond yields makes holding gold less
attractive as investors typically tend to gravitate toward
assets that generate steady income in the form of interest or
“In an environment of rising U.S. yields, growth recovery,
vaccine rollouts, and investors getting more optimistic on
growth prospects; demand for safe havens will struggle,” said
Lachlan Shaw, National Australia Bank’s head of commodity
While the U.S. Federal Reserve has downplayed the rise in
yields so far, the European Central Bank will discuss on
Thursday the merits of intervening to bring them
“Central banks will need to try and strike a balance between
yields reflating in a reasonable fashion at a reasonable speed,
compared to the recovery in economic activity, and so there may
be tweaks along the way,” Shaw said.
Holdings of the world’s largest gold-backed exchange-traded
fund, SPDR Gold Trust , fell to their lowest since April
2020 on Monday.
Silver rose 0.8% to $25.29 an ounce. Palladium
climbed 0.1% to $2,316.54. Platinum gained 1.2% to
(Reporting by Sumita Layek in Bengaluru; Editing by Anil
D’Silva and Aditya Soni)