Gold prices dipped on Monday to their
lowest in more than two weeks, as bets for an increasingly
aggressive and hawkish US Federal Reserve approach to
tightening policy monetary boosted the dollar and pressured
demand for bullion.
Spot gold was down 0.3% at $1,923.74 per ounce, as of
0321 GMT, hitting its lowest since April 7. US gold futures
were down 0.6% at $1,923.30.
Although the 10-year US Treasury yield is nearing 3% and
theoretically that’s supposed to be a tipping point for gold, it
is more about real yields that are starting to catch up and that
will weigh on gold, said Stephen Innes, managing partner at SPI
With expectations for a half-percentage point interest rate
hike at the Fed’s May meeting now locked in, traders on Friday
piled into bets that the US central bank will go even bigger
in subsequent months.
The dollar firmed near its highest in two years,
making greenback-priced gold costlier for other currency
Gold is highly sensitive to rising US short-term interest
rates and higher yields, which increase the opportunity cost of
holding non-yielding bullion. It is, however, seen as a safe
store of value during economic and political crises.
Gold still has some intrinsic value when economies slow
because then, banks don’t want to raise interest rates, Innes
said, adding: “The market is pricing in rates, rates, rates. But
what happens if the economy starts tanking very aggressively?”
US officials arrived in Kyiv late on Sunday and held talks
with President Volodymyr Zelenskiy, an aide to the Ukrainian
leader said, as Russia’s invasion entered a third month.
Spot silver dipped 1% to $23.89 per ounce, platinum
eased 0.4% to $927.00, and palladium fell 2.9% to
(Reporting by Bharat Govind Gautam in Bengaluru; Editing by