SINGAPORE: Gold prices extended losses for a fifth straight session in Asian trade on Wednesday, slipping to near two-week lows as soaring US Treasury yields and a firmer dollar dented bullion’s appeal.
Spot gold fell 0.5% to $1,786.11 per ounce by 0813 GMT. US gold futures fell 0.6% to $1,787.70.
“Investors are eyeing rising yields, dollar and are hesitant to do any bargain hunting on the precious metals at the moment as yields may go further up in view of reflation hopes and impending stimulus package,” said DailyFX strategist Margaret Yang. “In the near-term gold price maybe under further pressure.”
Higher inflation boosts gold but also lifts Treasury yields, which in turn increases the opportunity cost of holding bullion. “Deep corrections of (gold) prices due to short-term fluctuations are viewed as buying opportunities,” Avtar Sandu, senior commodities manager at Phillip Futures, said in a note.
Investors are also looking forward to the minutes of the Federal Reserve’s end-January monetary policy meeting due on Wednesday. “A more dovish tone (from the Fed) is going to provide gold some support or else, a neutral statement like before is going to have very little impact,” said DailyFX strategist Margaret Yang.—Reuters
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