Photographer: Andrey Rudakov / Bloomberg
Photographer: Andrey Rudakov / Bloomberg
Gold fell as the dollar remained resilient and 10-year government bond yields were close to their highest levels in more than a year, weighing on the non-yielding precious metal.
Investors will turn their attention to a heavy bond auctions targeting maturities that have been troubled by better prospects for growth and inflation. Federal Reserve Chairman Jerome Powell echoed this in a Wall Street Journal editorial that the central bank will continue to support the economy “while it lasts” as the recovery is far from complete. Richmond Fed president Thomas Barkin said in a Bloomberg TV interview on Sunday that it is no sign of unwanted inflationary pressures yet.
Precious metal is down nearly 9% this year as investors moved away from havens to riskier assets, although its role as an inflation hedge has given some price support. On Friday, the Fed said it will allow a significant capital breach for major banks expires at the end of the month. That saw dollar and bond yields ticking higher, with the last Monday holding nearly its highest level in about 14 months.
“The opportunity costs of living in a reflationary environment seem to hold back gold,” said Chris Weston, chief of research at Pepperstone Group Ltd. play better. “
Spot gold fell 0.7% in London to $ 1,732.47 an ounce at 6:46 am in London, up 0.5% on Friday. Silver fell 2.3%, while platinum and palladium also declined. The Bloomberg Dollar Spot Index advanced a third day.
Meanwhile, Powell and Treasury Secretary Janet Yellen are expected to make their first joint appearance before the US House Financial Services Committee to testify on the Fed and Treasury pandemic policy on Tuesday.
– With the help of Swansy Afonso