Wednesday, July 6

Gold jumps 1.5% as dollar, yields retreat


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Gold rose over 1.5% on Thursday as a

slide in the dollar and Treasury yields burnished bullion’s

safe-haven appeal after weak US jobs numbers compounded

economic concerns.

Spot gold rose 1.4% to $1,840.97 per ounce by 2:20

pm ET (1820 GMT), while US gold futures settled up

1.4% at $1,841.2.

Gold prices dropped to a near four-month low earlier on

Monday and are up about 3% since the dollar backtracked from

20-year highs.

“Dollar is falling and yields are significantly lower and

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this is good news for gold,” said Edward Moya, senior analyst

with OANDA.

Making bullion cheaper for overseas buyers, the dollar slid

1%, while US yields dropped to a three-week low.

Although the number of Americans on jobless rolls are at its

lowest since 1969 in early May, weekly jobless claims

unexpectedly rose last week.

“Gold is attracting safe-haven flows as the focus has

shifted to the weakness in the US with jobless claims rising

and all the negative talk about inflation. There is good amount

of pessimism with regards to global stocks,” Moya added.

Further aiding the safe-haven metal’s appeal, global equity

markets skidded further as fresh signs of slowing growth led

investors to sell stocks and move into safe-haven assets.

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Gold is considered an inflation hedge. However, the metal

has had to battle with the dollar as a safe-haven of late given

the US Federal Reserve’s aggressive policy stance to fight

surging prices.

Non-yielding bullion tends to fall out of favor when

interest rates rise.

The recent retreat in gold prices has helped its appeal

among investors as they continue to seek safety from riskier

assets and hedge against inflation, Fawad Razaqzada, market

analyst at City Index, wrote in a note.

Spot silver was up 2.5% to $21.92 per ounce, platinum

jumped 3.1% to $964.23 and palladium rose 0.1% to

$2,018.06.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by

Krishna Chandra Eluri and Amy Caren Daniel)



financialpost.com