Friday, March 29

Gold prices buoyed by fall in US bond yields


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Gold prices treaded water on Wednesday,

with lower US Treasury yields lending support, as bullion

struggled to break out of range-bound trading.

Spot gold was up 0.1% at $1,821.53 per ounce by 0550

GMT. US gold futures firmed 0.1% at $1,822.10.

Helping the appeal of non-yielding bullion, benchmark US

10-year Treasury yields fell on Wednesday after three straight

sessions of gains.

“Overall, the outlook for interest rates means that when we

do get a breakout of this trading zone we’ve been stuck in now

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for a couple of months, it’s more likely to be to the downside,”

said Michael McCarthy, chief strategy officer at Tiger Brokers,

Australia.

Higher short-term US interest rates and bond yields raise

the opportunity cost of holding bullion, which yields no

interest.

“Rising interest rates and a stronger US dollar are acting

against inflation-hedging forces. So we’ve got balance in the

gold market at the moment,” McCarthy said.

The US dollar rose 0.1%, making gold more expensive

for buyers holding other currencies.

“The investment world is increasingly alarmed at the

deterioration of the global economic climate and this has led to

severe bouts of de-leveraging across many markets, including

gold,” said Clifford Bennett, chief economist at ACY Securities.

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“However, just as we have seen in the case of black gold

(oil), these sell-offs can represent excellent long-term

investment opportunities. And perhaps more importantly, a

valuable safe-haven trade.”

Earlier, the United States banned new imports of Russian

gold, acting on commitments made by the Group of Seven leaders

this week to further punish Russia over its invasion of

Ukraine.

The move, however, is being seen as symbolic, as gold

Exports from Russia to the West have already dried up.

Spot silver dipped 0.1% to $20.81 per ounce, while

platinum rose 0.9% to $918.32, and palladium

gained 2% to $1,911.72.

(Reporting by Bharat Govind Gautam in Bengaluru; Editing by

Rashmi Aich and Amy Caren Daniel)

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