Gold rises as dollar edges lower
Bengaluru — Gold prices rose on Tuesday after hitting a near one-month low in the previous session, as a slight pullback in the US dollar and lower treasury yields increased bullion’s appeal.
Spot gold was up 0.3% at $1,902.46 an ounce at 2.49am GMT. US gold futures were up 0.34 at $1,902.60.
The dollar eased from a two-year high scaled in the previous session, making greenback-priced gold cheaper. Benchmark US 10-year treasury yields also eased, increasing the appeal of zero-yield gold.
“Some tentative support has appeared in Asia as China eased foreign currency reserves for local banks and set a neutral USD/CNY fix to support the yuan,” said Oanda senior analyst Jeffrey Halley, adding gold’s stabilisation looked fragile.
China’s central bank said it would step up prudent monetary policy support to the real economy, especially to small firms hit by the Covid-19 pandemic, responding to a media question seeking comment on swings in the financial markets.
Meanwhile, Russia told the world not to underestimate the considerable risks of nuclear war it said it wanted to reduce and warned that conventional Western weapons were legitimate targets in Ukraine, where battles raged in the east.
Bullion is seen as a safe store of value during economic and political crises. Spot silver gained 1% to $23.85 an ounce, platinum rose 0.6% to $926.00, and palladium advanced 2.1% to $2,189.18.
Palladium prices fell nearly 13% on Monday as fears of further Covid-19 lockdowns in China reduced demand prospects for the autocatalyst metal, which is used in vehicle exhausts to curb emissions.
Like gold, the recovery in palladium looks fragile and an escalation of the Covid-19 situation in Beijing almost certainly sees a test of support at $2,025, Halley said.