Gold prices inch higher as dollar declines
- 22 Feb 2021
Gulf Today Report
Gold prices climbed on Monday due to dollar declining and mounting pressure from firmer Treasury yields, this rebound comes after hitting a more than seven-month low in the previous session.
Spot gold rose 0.1% to $1,783.56 per ounce by 03:04 GMT while US gold futures gained 0.4% to $1,784.40.
Howie Lee, an economist at OCBC Bank said, "gold is in a weird place... while there's clearly a need for inflation hedging, firming risk sentiment has pressured gold."
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The easing of dollar made gold cheaper for other currency holders but the jumped in US Treasury yields has increased the opportunity cost of holding non-yielding bullion.
Market participants await Federal Reserve Chairman Jerome Powell’s testimony on the Semiannual Monetary Report to Congress that would be starting on Tuesday.
"The rise in yields will be the major headwind for gold for now, but if Powell hints at any dovishness or implies that current yields are too high for sustained economic recovery... then we can see gold embark on a rally again," Lee said.
