Gold Up however Stays Pressured by Climbing U.S. Treasury Yields


From Gina Lee – Gold rose in Asia Thursday morning after falling to a seven-week low in the previous session, but rising US Treasury yields continued to exert pressure.

Gold futures rose 0.49% to $ 1,731.35 by 12:28 PM ET (4:28 PM GMT) and made up some of their losses on Wednesday when they fell to $ 1,720.49, the lowest As of August 9th. Benchmark yields on 10-year US Treasuries also rose, holding above 1.5%, a level not seen since late June 2021.

“Gold is consolidating before it maybe another big leg down,” DailyFX currency strategist Ilya Spivak told Reuters, referring to the move by the Fed towards asset reduction and a steeper rate hike cycle than the markets had originally anticipated.

“While there are numerous risks that could help gold break higher, such as weaker economic data or the Evergrande debt crisis that may spill over into other economies, these are unlikely to provide any lasting support.”

A break below $ 1,700 could cause gold to test the $ 1,675 to $ 1,680 level, Spivak said.

Central bank governors, including Federal Reserve Chairman Jerome Powell and European Central Bank (ECB) President Christine Lagarde, as well as the Governors of the Bank of England and the Bank of Japan, Andrew Bailey and Haruhiko Kuroda, spoke at an ECB- Forum. While watching inflation, they were cautiously optimistic that the phenomenon will only be temporary.

In the Asia-Pacific region, China’s earlier in the day data showed that the purchasing managers’ index (PMI) for manufacturing was below expectations of 49.6 in September. However, Caixin’s non-manufacturing PMI and manufacturing PMI were 53.2 and 50, respectively, better than expected.

For other precious metals, silver rose 0.2%, platinum 0.6% and palladium 0.7%.

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