Gold hits two-week low as U.S. yields approach 3 percent, lifting dollar

Reuters  |  LONDON 

By Maytaal Angel

The yield on 10-year U.S. Treasuries hit its highest since January 2014, lifting the dollar index to a seven-week peak and making dollar-priced gold costlier holders of other currencies.

"If we break above (3 percent) it will be first time in 5 years this has happened and this increases opportunity cost of holding (non-yielding) gold," said Jonathan

But he said the reason yields were rallying was because interest rates were expected to climb due to rising inflation. "If inflation is rising, gold provides a hedge," he said.

said he saw longer term upside risk for gold from rising inflation, returning geopolitical tensions and a U.S. currency stuck in a long-term downtrend as central banks around the world begin raising rates.

Spot gold was down 0.5 percent at $1,327.93 per ounce at 1005 GMT, after earlier touching its lowest since April 9 at $1,326.91.

U.S. gold futures fell 0.6 percent to $1,329.80 per ounce.

Gold, seen as a safe haven in times of political turmoil, was also under pressure after said at the weekend it would suspend nuclear and missile tests before planned summits with and the

Added to this were signs that U.S. relations might be thawing.

But easing world stocks limited gold's losses, as investors awaited earnings from global tech firms and U.S. bond yields approached peaks that hurt risk appetite in the past. Gold often trades counter to equities, which are seen as risky assets.

A in Hong Kong said gold prices were also underpinned by the arbitrage in

Speculators raised their net long or buy positions in COMEX gold by 5,382 contracts to 143,594 contracts in the week to April 17, data showed on Friday.

Spot gold may test support at $1,326 per ounce, following its failure to break resistance at $1,354, said.

Among other precious metals, spot silver fell 1 percent to $16.94 per ounce.

Platinum was down 0.1 percent at $921.80 an ounce, having hit a two week low of $914.50, while palladium dropped 1.4 percent to $1,016 an ounce.

(Additional reporting by Apeksha Nair; Editing by Edmund Blair)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, April 23 2018. 16:17 IST