Tue, February 07, 2023

Gold prices ease on higher U.S. Treasury yields

gold

Gold prices traded lower on Friday as higher U.S. Treasury yields dented the appeal of bullion.

Accordingly, futures tied to the precious yellow metal skidded 0.83% or 16.10 points to $1,933.10 per troy ounce. It reversed a gain of 0.81% to $1,949.20 yesterday.

At the same time, spot gold shed 0.41% or 7.99 points to $1,929.39 per troy ounce. It edged down from its Thursday’s upturn of 0.22% to $1,937.22.

Eventually, the benchmark U.S. 10-year Treasury note increased to a record 2.40% mark today. After dropping to a one-week low in the previous session, it regained its strength.

The higher yields increase the opportunity cost of holding gold. In addition, the American dollar firmed for the second consecutive session, making greenback-priced bullion less appealing.

The U.S. dollar index climbed 0.13% or 0.12 points to 98.43 after adding 0.54% yesterday.

Correspondingly, the precious yellow metal is ending the week about 1.40% lower.

Earlier, it posted a significant loss on signs of progress in peace talks between Russia and Ukraine.

The diplomatic meeting of the two countries aimed to end the five-week war. The negotiations resumed even as Kyiv braced for further attacks in its south and east areas.

Moreover, market participants looked forward to the release of the key U.S. non-farm payrolls later this day.

Analysts widely anticipated the indicator to decline to 490,000 in March from the previous result of 678,000.

This labor report could help the Federal Reserve decide whether to order an interest rate hike of up to 50 basis-points next month.

An upbeat jobs data would reflect that the economy has more underlying momentum than previously assumed.

Gold down as Palladium rises

Unlike gold, palladium contracts jumped 1.95%, or 41.17 points, to $2,296.52 per troy ounce. It extended a jump of 0.42% to $2,278.50 on Thursday.

Subsequently, the auto-catalyst metal hit a record high of $3,440.76 per ounce earlier this month. It benefited after the West slapped serious sanctions on top-producer Russia.

Meanwhile, platinum futures decreased 0.90%, or 9.60 points, to $987.20 per troy ounce. It extended a plunge of 0.99% to $984.15 yesterday.

Nevertheless, both precious metals are still on course for a fourth straight weekly loss as supply fears eased.

Silver futures dwindled by 1.28% or 0.31 points to $24.82 per troy ounce but set for a quarterly gain.

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