Gold prices firm on weaker U.S. dollar, Treasury yields

Reuters2021-05-24

May 24 (Reuters) - Gold prices edged up on Monday, hovering near their highest in more than four months, as a weaker dollar and pullback in U.S. Treasury yields supported the safe-haven metal.

  • Spot gold was up 0.1% at $1,882.10 per ounce by 0050 GMT. Last week, gold prices hit their highest level since Jan. 8 at $1,889.75.
  • U.S. gold futures rose 0.3% to $1,882.90 per ounce.
  • The dollar stood near its lowest levels in three months against the resurgent euro and other European currencies, making gold cheaper for other currency holders.
  • Benchmark 10-year Treasury yields were hovering near a week low. Lower bond yields reduce the opportunity cost of holding non-interest bearing gold.
  • Data on Friday showed U.S. factory activity gathered speed in early May amid strong domestic demand.
  • Federal Reserve officials and new Dallas Fed data have begun lowering expectations for May jobs growth in the United States as business hiring plans continue to outrun the supply of people able or willing to work.
  • Asian shares got off to a cautious start on Monday as investors anxiously awaited a key read on U.S. inflation this week for cues on monetary policy.
  • The U.S. central bank has pledged to keep interest rates low until the economy reaches full employment, and inflation hits 2% and is on track to "moderately" exceed that level for some time.
  • Widespread lockdowns coupled with a jump in domestic prices stifled the physical gold market in India, as it grappled with a fierce COVID-19 wave.
  • Speculators raised their net long positions in COMEX gold in the week ended May 18, the U.S. Commodity Futures Trading Commission said on Friday.
  • Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.6% to 1042.92 tonnes on Friday.
  • Palladium eased 0.1% to $2,780.54 per ounce, silver was steady at $27.52, while platinum edged 0.4% higher to $1,171.64.

(Reporting by Brijesh Patel in Bengaluru, Editing by Sherry Jacob-Phillips)

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