BENGALARU: Gold prices fell yesterday as US rate-hike expectations lifted Treasury yields to their highest in a month, while hopes for a progress in Russia-Ukraine peace talks improved risk appetite, denting bullion’s appeal.
Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion. Higher rates, aimed at curbing inflation, also dent gold’s appeal as an inflation hedge.
Spot gold was down 0.5% at US$1,975.90 (RM8,308) per ounce. US gold futures shed 0.3% to US$1,980 (RM8,325).
“One key reason is surging Treasury yields. Also market seems to be pricing in on the Federal Open Market Committee meeting tomorrow at which the US Federal Reserve may start to kick off the tightening cycle. So, this is a negative factor for gold,” said Margaret Yang, a strategist at DailyFX.
The benchmark US 10-year Treasury yields rose to a near one-month high. — Reuters
Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion. Higher rates, aimed at curbing inflation, also dent gold’s appeal as an inflation hedge.
Spot gold was down 0.5% at US$1,975.90 (RM8,308) per ounce. US gold futures shed 0.3% to US$1,980 (RM8,325).
“One key reason is surging Treasury yields. Also market seems to be pricing in on the Federal Open Market Committee meeting tomorrow at which the US Federal Reserve may start to kick off the tightening cycle. So, this is a negative factor for gold,” said Margaret Yang, a strategist at DailyFX.
The benchmark US 10-year Treasury yields rose to a near one-month high. — Reuters
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