Gold steady after early gains

Bengaluru — Gold prices steadied after gaining in early trade on Wednesday as weakness in the dollar due to higher inflation was countered by some firming in treasury yields.

Spot gold was flat $1,743.54/oz at 3.53am GMT, after rising as much as 0.3%. US gold futures fell 0.1% to $1,745.00/oz.

“Though the dollar is weaker this morning, but a slight uptick in US treasury yields is keeping gold’s upside movement muted,” said Margaret Yang, a strategist at DailyFX. “The next big thing that investors are looking for is the retail sales data on Thursday and if it beats forecasts, which it is expected to … [it] will put some pressure on gold,” she said, adding that the fall could be limited since gold has double-bottomed at $1,680.

Consumer prices in the US soared the most in more than eight-and-a-half years in March, setting off what most economists expect to be a fleeting spell of higher inflation, supporting bullion — a traditional inflation hedge.

The dollar fell to three-week lows, making gold cheaper for holders of other currencies, while a slight rise in treasury yields increased the opportunity cost of holding the metal that pays no return.

Bullion was also supported by comments from Philadelphia Federal Reserve president Patrick Harker who said the Fed will not withdraw its funding just yet even as the US economy could expand by 5%-6% in 2021.

Gold must test the $1,760-mark, a former support turned resistance, to attract new bullish-pattern traders and push prices higher, Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note.

Silver rose 0.2% to $25.37 and palladium was up 0.1% at $2,691.62 per ounce. Platinum gained 0.8% to $1,165.43/oz.

Reuters