NEW YORK: Gold eased back on Wednesday as yields recovered with the focus returning to upcoming economic data, after briefly breaking above $2,000 spurred by fresh worries surrounding the US banking turmoil.
Spot gold fell 0.6% to $1,985.80 per ounce by 12:25 p.m. EDT (16:25 GMT) after jumping as high as $2,009.32 earlier. US gold futures slipped 0.4% to $1,996.20.
First Republic Bank’s shares hit a record low after a report said the US government was unwilling to intervene in the rescue process for the troubled lender.
“That was the catalyst for gold prices to revisit slightly higher levels,” said Daniel Ghali, commodity strategist at TD Securities.
But overall, trend-following algorithms have effectively reached their maximum long positions, Ghali added.
Benchmark US Treasury yields recovered from a near two-week low, raising the opportunity cost of holding zero-yield bullion.
Gold declined despite the dollar shedding 0.4%, while investors also took stock of upbeat risk sentiment driven by strong earnings.
Traders were now focused on US quarterly GDP data due on Thursday, followed by the core personal consumption expenditures index on Friday, the Fed’s preferred inflation gauge.
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