ANL 28.85 Increased By ▲ 0.50 (1.76%)
ASC 15.15 Increased By ▲ 0.01 (0.07%)
ASL 24.15 Increased By ▲ 0.50 (2.11%)
AVN 97.95 Increased By ▲ 2.35 (2.46%)
BOP 9.30 Increased By ▲ 0.10 (1.09%)
BYCO 10.35 Increased By ▲ 0.28 (2.78%)
DGKC 135.50 Increased By ▲ 3.00 (2.26%)
EPCL 49.98 Increased By ▲ 1.28 (2.63%)
FCCL 25.16 Increased By ▲ 0.61 (2.48%)
FFBL 25.22 Decreased By ▼ -0.41 (-1.6%)
FFL 16.04 Increased By ▲ 0.04 (0.25%)
HASCOL 11.07 Increased By ▲ 0.01 (0.09%)
HUBC 85.00 Increased By ▲ 0.80 (0.95%)
HUMNL 7.70 Increased By ▲ 0.43 (5.91%)
JSCL 25.75 Increased By ▲ 1.10 (4.46%)
KAPCO 37.45 Increased By ▲ 1.35 (3.74%)
KEL 4.17 Increased By ▲ 0.12 (2.96%)
LOTCHEM 15.13 Increased By ▲ 0.37 (2.51%)
MLCF 47.18 Increased By ▲ 1.18 (2.57%)
PAEL 39.40 Increased By ▲ 0.65 (1.68%)
PIBTL 12.04 Decreased By ▼ -0.01 (-0.08%)
POWER 10.65 Increased By ▲ 0.05 (0.47%)
PPL 91.00 Increased By ▲ 0.40 (0.44%)
PRL 26.69 Increased By ▲ 0.39 (1.48%)
PTC 9.05 Decreased By ▼ -0.09 (-0.98%)
SILK 1.45 Increased By ▲ 0.05 (3.57%)
SNGP 38.75 Decreased By ▼ -0.25 (-0.64%)
TRG 145.70 Increased By ▲ 6.95 (5.01%)
UNITY 32.90 Increased By ▲ 0.75 (2.33%)
WTL 1.61 Increased By ▲ 0.05 (3.21%)
BR100 4,959 Increased By ▲ 85.49 (1.75%)
BR30 25,734 Increased By ▲ 497.97 (1.97%)
KSE100 45,966 Increased By ▲ 603.04 (1.33%)
KSE30 19,199 Increased By ▲ 314.87 (1.67%)
Markets

Gold scales 1-week peak as dollar falters, yields ease

  • The European Central Bank on Monday signalled that policymakers are becoming uncomfortable with the recent surge in government bond yields.
23 Feb 2021

Gold climbed a one-week peak on Tuesday, bolstered by a weaker dollar and a retreat in US Treasury yields, while concerns of rising inflation further boosted bullion's appeal as a hedge against inflation.

Spot gold rose 0.4% to $1,815.52 per ounce by 0304 GMT, after hitting its highest since Feb. 16 at $1,815.63 earlier in the session. US gold futures gained 0.3% to $1,813.50.

"One of the few assets that is more out of favour than gold at the moment is the dollar... so that is supporting gold prices by extension," said IG Market analyst Kyle Rodda.

The dollar hit an over one-month low, making gold affordable for other currency holders, as investors await US Federal Reserve Chairman Jerome Powell's testimony to Congress later in the day.

Benchmark US Treasury yields eased from a near one-year peak on Monday, reducing the opportunity cost of holding non-yielding bullion.

"Gold's trend seems to be to the downside, and there's no indication that it's reversing for now... until we get a real spike in inflation expectations or a Fed that talks about controlling the yield curve," Rodda said.

Gold, often viewed as an inflationary hedge, rose 1.5% in the previous session, as fears of rising inflation dragged global equities lower.

The European Central Bank on Monday signalled that policymakers are becoming uncomfortable with the recent surge in government bond yields.

Gold was "well supported throughout the pandemic as investors sought a haven for funds. But the tide is turning, as interest rates start to rise and investors rekindle their love of bonds," ANZ analysts said in a note.

"However, fixed interest returns may be severely eroded if inflation takes off."

Silver rose 0.3% to $28.23 an ounce, having earlier hit a three-week peak at $28.31. Platinum climbed 0.1% to $1,273.10, while palladium gained 0.5% to $2,406.41.