Gold Stable as Yields Rise, Dollar Against Inflation Risks

  • Spot gold remains neutral in the $1,815-$1,830/oz range – technical data
  • United States 10 years. Treasury yields near two-year high

Jan 17 (Reuters) – Gold prices held steady on Monday as market participants weighed the outlook for global economic policy, with demand for inflationary hedging countering hawkish comments from U.S. Federal Reserve officials holding the dollar and Treasury yields supported.

Spot gold was little changed at $1,818.76 an ounce at 0330 GMT. US gold futures also remained unchanged at $1,817.90.

“Gold has been locked in a sideways consolidation for some time now, the market still hasn’t decided where it’s going,” said OCBC Bank economist Howie Lee, adding that “there is still persistent demand as a hedge against inflation”.

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US 10-year Treasury yields hovered near two-year highs hit the previous week, after the Fed said manufacturing output fell 0.3% in December, far from an estimate calling for a rise by 0.5%. Read more

Traders are now awaiting speeches from Fed officials this week ahead of the January 25-26 policy meeting, but there have been more than enough hawkish comments to see the market almost fully price in an initial rate hike. interest for March and rates of 1.0% by the end of the year. find out more

Gold is considered a hedge against inflation, but the metal is very sensitive to rising US interest rates, which increases the opportunity cost of holding non-performing bullion.

The Dollar Index (.DXY) held on to Friday’s gains as selling pressure eased on the belief that the Fed’s tightening measures were largely priced in.

Investors are also on the lookout for the Bank of Japan’s policy meeting ending on Tuesday, UK inflation data on Wednesday and Australian jobs numbers on Thursday.

Spot gold remains neutral in a range of $1,815-$1,830 an ounce, and a leak could suggest direction, according to Reuters technical analyst Wang Tao.

Spot silver fell 0.1% to $22.93 an ounce, platinum fell 0.2% to $967.99 and palladium fell 0.4% to $1,870.29 .

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Reporting by Asha Sistla in Bengaluru; edited by Uttaresh.V

Our standards: The Thomson Reuters Trust Principles.


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