Gold Advances as Bond Yields Retreat; Traders Eye CPI Data
(Bloomberg) -- Gold rose as Treasury yields declined, with investors assessing inflationary pressures from rising energy prices and the outlook for monetary policy.
U.S. stocks fluctuated while Treasury 10-year yields fell, boosting demand for non-interest-bearing bullion.
Traders will be on the lookout for cues on the Federal Reserve’s taper timeline from the U.S. consumer price index Wednesday. The data are expected to show cost pressures remained elevated last month. While minutes from the Federal Reserve’s latest meeting are likely to signal a scaling back of asset purchases soon, the latest miss on jobs data may complicate the timing of when tapering could start.
Bullion has struggled for direction lately amid a dearth of interest from investors. So far, surging energy prices and mounting fears of stagflation have failed to spark buying, despite equities remaining under pressure. Holdings in exchange-traded funds have declined over the past three weeks, and are near the lowest since May 2020.
“Gold remains stuck in neutral as attempts to catch a bid on the back of surging energy prices have so far failed,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “A bigger-than-expected CPI print could be the trigger needed to send it through resistance.”
Spot gold added 0.3% to $1,759.99 an ounce by 3:18 p.m. in New York, after retreating 0.2% Monday. Gold for December delivery settled 0.2% higher at $1,759.30 per ounce on the Comex. The Bloomberg Dollar Spot Index was little changed. Silver, palladium and platinum fell.
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