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Gold Edges Down on Rising Dollar, Bond Yields

* Expect more downside risk for gold - analyst

* Dollar stands tall vs rivals on firmer yields

* China’s economy grew slower than expected in Q3- official data

Oct 18 (Reuters) - Gold prices inched lower on Monday, as an uptick in U.S. bond yields and a robust dollar dulled bullion’s appeal.

Spot gold fell 0.3% to $1,762.80 per ounce by 0926 GMT. U.S. gold futures were down 0.2% at $1,764.30.

Raising gold’s opportunity cost, U.S. benchmark 10-year Treasury yields extended gains, and the dollar rose 0.2% against its rivals, which made bullion more expensive for holders of other currencies.

A stronger dollar is carrying more weight as a safe haven because of the “inflation angle, which drives up expectations for the Federal Reserve to start tapering, and even to set the timing to raise interest rates sometime next year,” said Ricardo Evangelista, senior analyst at ActivTrades.

While gold is seen as an inflation hedge, it also contends with the greenback for safe-haven status and reduced central bank stimulus and interest rate hikes push government bond yields up, weighing on non-yielding bullion.

Market participants also weighed up data showing China’s economy grew slower than expected in the third quarter with power outages and supply bottlenecks hurting factories.

“With the slowdown in economic activity in China, which will have repercussions globally”, the dollar is expected to gain, and gold will suffer, Evangelista added.

Meanwhile, Bank of England Governor Andrew Bailey sent a fresh signal that the British central bank is gearing up to raise interest rates for the first time since the onset of the coronavirus crisis as inflation risks mount.

“Bitcoin is approaching its April record high again. In recent months, gold and Bitcoin have often been seen as competitors,” Commerzbank analyst Daniel Briesemann said in a note.

“The other precious metals are likewise weaker as the new week gets underway. They seem to be more under the influence of gold at present.”

Elsewhere, spot silver fell 0.1% to $23.26 per ounce, platinum was down 1.1% at $1,042.55, and palladium shed 1.2% to $2,047.29.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Shailesh Kuber)

Source: Reuters

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