SINGAPORE: Gold prices rose in Asian trade on Thursday, rebounding from a near nine-month low hit in the previous session, but rising US Treasury yields continued to weigh on non-yielding bullion.
Spot gold rose 0.5% to $1,719.21 per ounce by 0729 GMT, having dropped to its lowest since June 9 at $1,701.40 on Wednesday. US gold futures was up 0.1% to $1,717.50.
“It’s just a technical bounce. The broad fundamentals are still on the downside for gold - the dollar reversing, US yields rising have been negative for gold prices,” said Hareesh V, head of commodity research at Geojit Financial Services. He said gold’s safe-haven appeal had reduced.
Investors await Federal Reserve Chairman Jerome Powell’s remarks before a virtual Wall Street Journal Jobs Summit at 1705 GMT, on the rapid rise in yields and clues on policy outlook.
The market will need more than “jawboning” if the Fed is serious about keeping interest rates low, “but in the absence of that, it would continue on its own path, which is higher yields and steepening of the yield curve,” said Howie Lee, an economist at OCBC Bank.
The US Senate delayed a debate on a $1.9 trillion COVID-19 relief bill until at least Thursday.
Support from inflows in gold exchange traded funds that were a major driver for prices in 2020 also appear to be waning, said Michael Langford, director at corporate advisory AirGuide.
Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell to their lowest since May 2020 on Wednesday.—Reuters
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