Gold prices edge higher as US Treasury yields retreat
- US bank Wells Fargo said it has expanded its precious metals trading business, filling gaps in the market left by the withdrawal of Bank of Nova Scotia (Scotiabank).
Gold prices edged higher on Tuesday as a retreat in US Treasury yields and optimism over the $1.9 trillion coronavirus relief bill lifted the allure of the non-yielding metal.
FUNDAMENTALS
Spot gold was up 0.2% at $1,726.84 per ounce by 0046 GMT. US gold futures added 0.1% to $1,723.80.
Benchmark US Treasury yields eased further from a one-year high hit last week as Federal Reserve officials continued to downplay runaway inflation concerns.
While gold is considered a shield against inflation, higher yields have of late threatened that status, since they translate into higher opportunity cost of holding bullion, which pays no return.
The US Senate will start debating President Joe Biden's coronavirus relief bill this week, Senate Majority Leader Chuck Schumer said on Monday.
US manufacturing activity increased to a three-year high in February amid a surge in new orders.
The European Central Bank slowed its net purchases of debt last week even as borrowing costs jumped in the financial markets, casting a shadow over a nascent recovery in the pandemic-stricken euro zone economy.
US bank Wells Fargo said it has expanded its precious metals trading business, filling gaps in the market left by the withdrawal of Bank of Nova Scotia (Scotiabank).
Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.8% to 1,084.5 tonnes on Monday.
Silver gained 0.5% to $26.60 an ounce, while palladium climbed 0.4% at $2,358.16. Platinum rose 0.7% to $1,193.45.
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