November 29, 2022

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Gold prices rise as US bond yields fall By Alborsanews

© Reuters. Gold prices rise as US bond yields decline

They rose on Tuesday as rising fears of falling yields and a recession offset the impact of a small rise in the dollar.

It rose 0.4% to $1,778.81 an ounce, its highest since July 5 at $1,780.39. U.S. futures were also up 0.4% at $1,795.50 an ounce.

A decline in real interest rates in the United States has supported gold recently, and the next important data for the metal is Friday’s upcoming U.S. payrolls, UBS analyst Giovanni Stonovo said.

However, Stonovo said a large increase in interest rates by the US Federal Reserve and low inflation will weigh on prices over the next six months.

US 10-year Treasury yields hit a four-month low, reducing the opportunity cost of holding gold, while rising slightly after hitting lows four weeks earlier.

Gold has benefited from a recent set of weak economic data, as surveys on Monday showed that factories across the US, Europe and Asia struggled to ramp up activity last month.

Investors are closely watching macroeconomic indicators as Federal Reserve Chairman Jerome Powell said decisions on future rates will be determined by new data.

Increases in interest rates by major central banks to combat high inflation generally hurt the yellow metal’s attractiveness.

Amid China’s objections, traders are also watching for heightened Sino-US tensions as US House Speaker Nancy Pelosi is scheduled to visit Taiwan on Tuesday.

As for other precious metals, it rose 0.4% to $20.41 an ounce in spot trades, reversing course for a sixth straight session of gains.

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