Gold ticks up as U.S. bond yields ease; firm dollar caps gains


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Gold edged higher on Thursday as U.S.

bond yields pulled back slightly and Federal Reserve minutes

hinted a less aggressive rate-hike stance, although a firmer

dollar kept the metal’s gains in check.

Spot gold was up 0.2% at $1,764.75 per ounce, as of

0317 GMT, after falling to a two-week low of $1,753.97 in the

previous session. U.S. gold futures gained 0.1% to

$1,778.50 per ounce.

Benchmark U.S. 10-year Treasury yields edged

lower to 2.8731% after hitting a near one-month high of 2.9190%

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in the previous session. Lower yields reduce the opportunity

cost of holding non-interest bearing gold.

Meanwhile, the dollar hovered near a three-week high

hit earlier this week, making gold more expensive for buyers

holding other currencies.

“Gold might continue to struggle in the near-term now that

the U.S. dollar is perking up again,” said Matt Simpson, a

senior market analyst at City Index.

“It’s trading in a tight range today but near yesterday’s

post-FOMC lows, so downside risks remain in place in today’s

European and U.S. sessions.”

The minutes of Fed’s July meeting showed that the central

bank was contemplating paring back the pace of future rate hikes

in line with a slowdown in inflation but saw “little evidence”

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yet that pressures were easing.

Traders are now pricing in around a 63.5% chance of a

50-basis-point rate hike by the Fed in September and a 36.5%

chance of a 75-bp increase.

Gold prices have fallen more than $300, or nearly 15%, since

scaling above the key $2,000 per ounce mark in early March due

to the Fed’s rapid rate hikes to tame inflationary pressures.

Holdings of SPDR Gold Trust , the world’s largest

gold-backed exchange-traded fund, fell 0.32% to 989.01 tonnes on

Wednesday.

Spot silver fell 0.9% to $19.65 per ounce, platinum

eased 0.4% to $920.03, and palladium was steady at

$2,139.78.

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu

Sahu)

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