LONDON: Gold prices declined on Thursday, hovering near last session’s two-week low as the US Treasury yields resumed their climb while gains in equities also tempered the safe-haven metal’s appeal.
Spot gold fell 0.6% to $1,945.01 per ounce by 0954 GMT. US gold futures were down 0.4% at $1,947.20.
“We are seeing a decent pickup in equity markets in recent days so that is an indication that risk-on attitudes are back into the market and may be detracting a little bit from gold,” said WisdomTree analyst Nitesh Shah.
European shares rose on Thursday, while benchmark US 10-year Treasury yields edged higher towards a more than three-year peak scaled on Wednesday.
US bond yields have marched higher lately on expectations that the Federal Reserve will aggressively hike interest rates as inflation accelerates at its fastest rate in 40 years.
Gold, considered a hedge against inflation, is highly sensitive to rising US interest rates and Treasury yields, which increase the opportunity cost of holding the non-yielding bullion.
“Gold seems to be ignoring the strength of inflation right now,” WisdomTree’s Shah said, adding by the end of this quarter gold could breach the $2,000 mark, depending on sustained geopolitical tensions.
Earlier this week, gold came within striking distance of the key $2,000 level as concerns around the Russia-Ukraine conflict and rising inflationary pressures increased safe-haven demand.
Prices have declined over 2% since and touched a two-week low of $1,938.65 an ounce on Wednesday.
Gold will look to consolidate in the near-term and is currently doing so at around $1,940-$1,960 per ounce, said Brian Lan, managing director at dealer GoldSilver Central.
Spot silver dipped 1.2% to $24.88 per ounce, platinum fell 1.1% to $976.28 while palladium rose 1.1% to $2,479.27.
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