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Gold falls 1% on rising yields, improving risk appetite
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Gold prices slipped 1% to a two-week low on Thursday hit by rising U.S. Treasury yields and as an improvement in risk appetite dented the appeal of the safe-haven metal.
Spot gold fell 0.9% to $1,939.12 per ounce by 1145 GMT, after hitting its lowest level since April 8.
U.S. gold futures were down 0.6% at $1,943.60 per ounce.
"We are seeing a decent pickup in equity markets in recent days so that is an indication that risk-on attitudes are back into the market and may be detracting a little bit from gold," said WisdomTree analyst Nitesh Shah.
U.S. stock index futures rose on Thursday as heavyweight Tesla surged on strong results and United Airlines predicted a surprise profit in its current quarter. [.N]
Investors will be looking forward for fresh policy updates from European Central Bank President Christine Lagarde and Fed chair Jerome Powell at an IMF panel later on Thursday.
Benchmark U.S. 10-year Treasury yields edged higher towards a more than three-year peak scaled on Wednesday. [US/]
Yields have been marching higher recently on expectations that the Federal Reserve will aggressively hike interest rates as inflation accelerates at its fastest rate in 40 years.
Gold, considered a hedge against inflation, is highly sensitive to rising interest rates and Treasury yields, which increase the opportunity cost of holding the non-yielding bullion.
"Gold seems to be ignoring the strength of inflation right now," WisdomTree's Shah said, adding by the end of this quarter gold could breach the $2,000 mark, depending on sustained geopolitical tensions.
Gold came within striking distance of the key $2,000 level on Monday as concerns around the Russia-Ukraine conflict and rising inflationary pressures spurred safe-haven demand, although prices have declined about 3% since then.
Gold will look to consolidate in the near-term and is currently doing so at around $1,940-$1,960 per ounce, said Brian Lan, managing director at dealer GoldSilver Central.
Spot silver fell 2.3% to $24.59 per ounce, having earlier hit a two-week trough. Platinum was down 1.6% at $970.89 and palladium eased 0.1% to $2,448.53.
