Photographer: Andrey Rudakov / Bloomberg
Photographer: Andrey Rudakov / Bloomberg
Gold fell as the dollar remained resilient, and 10-year Treasury yields remained near their highest level in more than a year, weighing on the non-interest-bearing precious metal.
Investors will turn their attention to a heavy bond due bids that collapsed amid a bright outlook for growth and inflation. Federal Reserve Chairman Jerome Powell reiterated in a Wall Street Journal editorial that the central bank will continue to provide aid to the economy “as long as it is needed”, as the recovery is far from complete. Richmond Fed Chairman Thomas Barkin said in an interview with Bloomberg TV on Sunday that there is no sign of unwanted inflationary pressures yet.
Bullion has fallen by about 8% this year, with investors turning from paradise to riskier assets, although its hedging role has helped support prices. On Friday, the Fed said it would leave a significant capital cut for large banks expires at the end of the month. This has led to higher dollar and bond yields, with the latter staying close to the highest levels in about 14 months.
“The opportunity cost of being in a reflective environment seems to be holding back gold,” said Chris Weston, head of research at Pepperstone Group Ltd..
Spot gold fell 0.3% to $ 1,740.79 an ounce by 11:49 a.m. in Singapore, after rising 0.5% on Friday. Silver, platinum and palladium withdrew. The Bloomberg Dollar Spot index advanced on the third day.
Meanwhile, Powell and Treasury Secretary Janet Yellen are expected to make their first joint appearance before the U.S. House Financial Services Commission to testify about the Fed’s pandemic and treasury policies.