Gold Slips From Four-Month High as Treasury Yields Rebound

An employee places gold bars into a safety deposit box in a precious metals vault. (Photographer: Andreas Gebert/Bloomberg)

Gold Slips From Four-Month High as Treasury Yields Rebound

Gold slipped from the highest in more than four months as bond yields rebounded, hurting demand for the non-interest-bearing metal.

The yield on 10-year Treasuries advanced two basis points, while the dollar rose as well. A stronger greenback makes commodities including gold less appealing for investors holding other currencies.

Bullion has been rallying from an early-year slump, helped by central bankers’ reassurances on the outlook for monetary policy and increasing holdings in exchange-traded products backed by the metal.

“Gold slides back under $1,900 on a modest sell program,” said Tai Wong, head of metals derivatives trading at BMO Capital Markets. That suggests profit-taking helped by slightly higher yields post auction and a higher dollar.”

Gold Slips From Four-Month High as Treasury Yields Rebound
  • Gold fell 0.2% $1,895.23 an ounce at 2:42 p.m. in New York after rising as much as 0.7%. The precious metal is still up more than 7% this month, on course for its biggest gain since July. Futures for August delivery on the Comex rose 0.2% to settle at $1,903.80. Spot silver, platinum and palladium slipped.
  • The recent rally may not last, according to Giovanni Staunovo, commodity analyst at UBS Group AG.
    • “We believe inflation will level off over the coming months, and Fed officials to sound less dovish and look for higher nominal rates,” he said. “We expect gold to trend lower over the coming months.”

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