Gold inches higher in thin, rangebound trade

Bengaluru — Gold inched higher on Wednesday in thin rangebound trading as lower US Treasury yields boosted bullion’s appeal, keeping prices above the key level of $1,800 per ounce.

Spot gold was up 0.1% at $1,806.93 per ounce by 6.20am GMT, hovering near the intraday low of the previous session when bullion scaled a one-month high on signs of rising inflation before reversing course due to a firmer dollar.

US gold futures dropped 0.2% to $1,807.10.

“Gold’s attempts to stage a meaningful recovery remain unconvincing, with traders cutting long positions at the very first sign of trouble intraday,” Jeffrey Halley, a senior market analyst at Oanda, said in a note.

“With the US dollar looking more vulnerable to positive virus sentiment at the moment, gold could potentially move higher throughout this week, but I still doubt it could sustain those gains.”

Dollar-priced bullion tends to be sensitive to moves in the safe-haven currency, with a weaker dollar making gold more appealing to overseas buyers and vice versa.

Benchmark 10-year US Treasury yields edged lower, reducing the opportunity cost of holding non-interest paying gold.

Asian stocks slipped, after a mixed Wall Street session as the region’s investors positioned their portfolios for the new year and continued to grapple with increasing global numbers of Omicron coronavirus cases.

“A lot of economists are downgrading growth expectations in the US, and arguably we could have a softer end to the year than a lot of people had expected. So I think this is supporting gold,” said Stephen Innes, managing partner at SPI Asset Management.

Analysts have said gold trading is likely to remain thin and rangebound this week.

Spot silver was up 0.4% at $23.09 an ounce, platinum was 1.2% lower at $963.74, and palladium dropped 2% to $1,949.42. 

Reuters