Gold up as U.S. Treasury yields weaken, dollar eases

Thursday,   22-Jun-2017   10:41 AM (IST)

Gold prices rose for a second straight day on Thursday, supported by an easing dollar and weakness in U.S. Treasury yields. The U.S. Treasury yield curve flattened to almost 10-year lows on Wednesday as investors evaluated the impact of hawkish Federal Reserve policy on the economy even as inflation measures are deteriorating. Gold is highly sensitive to rising rates and yields, which increase the opportunity cost of holding non-yielding assets such as bullion while boosting the dollar, in which it is priced. Spot gold rose 0.5 percent to $1,252.30 per ounce at 0423 GMT. It rose 0.3 percent in the previous session, its largest intra-day percentage change since June 6. U.S. gold futures for August delivery rose 0.6 percent to $1,253.20 per ounce. Oil prices rose on Thursday but worries over whether OPEC-led output cuts would be able to rein in a three-year glut continued to keep prices around 10-month lows. The U.S. dollar slipped 0.1 percent against a basket of six major currencies, retreating from a one-month high of 97.871 set on Tuesday. U.S. home resales unexpectedly rose in May to the third highest monthly level in a decade and a chronic inventory shortage pushed the median home price to an all-time high. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.04 percent to 853.98 tonnes on Wednesday. Among other precious metals, silver gained 1 percent to $16.60 per ounce. Platinum touched its highest in a week during the session and was up 0.5 percent at $928.50 per ounce, while palladium slipped 0.4 percent to $884.75 per ounce.