Gold edges up after 3-day loss as Treasury yields slip
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Gold rose on Thursday after a three-day losing run, as bond yields slipped despite pressure from a firmer dollar and expectations that the U.S. Federal Reserve will keep raising interest rates.
Spot gold rose 0.6% to $1,771.09 per ounce, as of 1146 GMT, having slipped to $1,759.17 on Wednesday, its lowest since Aug. 3. U.S. gold futures rose 0.5% to $1,785.50 per ounce.
Helping gold, U.S. 10-year Treasury yields inched lower, reducing the opportunity cost of holding non-yielding bullion. [US/]
While not explicitly hinting at the pace of rate increases, the Fed minutes on Wednesday showed U.S. central bank policymakers committed to raising rates as high as necessary to tame inflation.
Gold is facing some pressure with "resumption of the dollar strength and also because the minutes talked about hiking rates. Although, they did hint, potentially further down the line at a slower pace," Saxo Bank analyst Ole Hansen said.
"Gold prices are close to unchanged on the year and that itself is pretty good performance considering the movements we've seen in dollar and yields."
The dollar index climbed to a three-week high, making dollar-priced bullion less appealing to overseas buyers. [USD/]
The euro zone inflation outlook has failed to improve, ECB board member Isabel Schnabel said, suggesting she favours another large interest rate increase next month even as recession risks harden.
Gold is considered an inflation hedge. However, as the asset pays no interest, high interest rates erode its appeal.
Recession fears could prompt some safe-haven flows into gold as central bank purchases are likely to be strong, with currencies depreciating and geopolitical risks rising. This should help mitigate weaker physical demand, ANZ analysts said in a note.
Data showed Swiss gold exports to China in July rose to their highest since December 2016.
Spot silver fell 0.2% to $19.88 per ounce, platinum rose 0.6% to $928.78 and palladium up 1.2% to $2,166.77.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Vinay Dwivedi and Maju Samuel)
