Gold remains strong amid low treasury yields and dollar strength

Gold edged higher on Wednesday on lower Treasury yields, but a stronger dollar, more interest rate hikes in the offing and optimism about a US debt deal held bullion to its first monthly decline in three.

Spot gold rose 0.4% to $1,967.29 an ounce on weaker-than-expected Chicago Purchasing Managers’ Index (PMI) data.

It is down about 1.1% this month and has lost more than $100 from near record highs in early May.

US gold futures rose 0.5% to $1,987.20.

“We have kind of a push-and-pull effect between lower yields and dollar pressure,” said David Mager, director of metals trading at High Ridge Futures. [US/] [USD/]

“With jobs data being relatively strong, concerns about the possibility of further rate hikes will obviously tend to put pressure on gold…and yet on the other hand, we have PMI data pulling in the opposite direction. “

The dollar index is heading for monthly gains, making bullion less attractive to overseas buyers.

Investors priced in a 68.8% chance of a hike of 25 basis points, compared with 60% before jobs data at the Federal Reserve’s June meeting.

Higher interest rates reduce the appeal for zero-yield gold.

But key support near $1,950 could provide momentum to push gold back to $2,000, said Edward Moya, senior market analyst at OANDA.

Traders also focused on developments around the US debt limit, with the US House of Representatives voting on a bill to lift the limit.

Silver rose 1.3% to $23.52 an ounce, platinum fell 1.7% to $996.68, while palladium slipped 2.4% to $1,366.67. All three were scheduled for monthly drops.

Russia’s Nornickel sees the global palladium market swinging from deficit in 2023 to surplus in 2024 as recycling outpaces a demand recovery.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – reuters,