Economic news

Gold Set to Snap 6-Day Losing Streak, U.S. Bond Yields Slide

* Spot gold may retest resistance $1,797/oz - technicals

* Platinum hits more than five-month low at $1,019/oz

June 21 (Reuters) - Gold prices rose on Monday, following sixth straight sessions of losses, as a drop in U.S. Treasury yields bolstered the non-yielding metal’s appeal.

Spot gold climbed 0.7% to $1,776.10 per ounce by 0732 GMT, while U.S. gold futures rose 0.4% to $1,775.5 per ounce.

The real yields are falling, helping gold prices to stabilise and attempt a rebound, said Margaret Yang, a strategist at DailyFX, adding “investors are also taking this as an opportunity to buy the dip in view of rising inflationary pressure.”

Benchmark U.S. Treasury yields fell to their lowest since late-February earlier in the session, reducing the opportunity cost of holding bullion, which pays no return.

Meanwhile, the U.S. dollar held near a multi-month peak hit in the previous session.

Last week, gold posted its worst weekly performance since March 2020, falling 6%, after the U.S. Federal Reserve signalled a sooner-than-expected tightening in its monetary policy.

“Near to medium-term bias has definitely turned negative for gold,” said Harshal Barot, a senior research consultant for South Asia at Metals Focus.

“Over the next few months if inflation readings do come higher consistently, and if we continue to see this progress in the labour market too, then markets will definitely start pricing in a possible rate hike in 2022.”

Investors now eye comments from several Fed officials who will be speaking this week. Chair Jerome Powell will testify before the Congress on Tuesday.

On the technical front, spot gold may retest a resistance $1,797 per ounce, a break above which could lead to a gain to $1,825, according to according to Reuters technical analyst Wang Tao.

Elsewhere, platinum earlier hit its lowest level since Jan. 11 at $1,019 per ounce and was last down 0.2% at $1,032.46. Palladium rose 1.3% to $2,497.73 per ounce, while silver gained 0.5% to $25.92.

(Reporting by Eileen Soreng and Arundhati Sarkar in Bengaluru, Editing by Sherry Jacob-Phillips, Amy Caren Daniel and Uttaresh.V)

Source: Reuters


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