Gold prices slid to the lowest in nearly two weeks as US bond yields surged, curbing the appeal of the non-interest bearing metal.
The global bond rout continued, with US 10-year Treasury yields jumping amid a debate on whether inflation is peaking. That helped inflation-adjusted rates turn positive for the first time in two years this week, a sign investors believe the US Federal Reserve could raise interest rates to cool inflation without severely hurting the economy.
Positive real rates reduce bullion’s appeal since it generates no interest.
Photo: AFP
“Yields are creeping higher again amid a raft of hawkish commentary from a variety of central banks that appears to be paving the way for increasingly aggressive action in the month ahead,” Oanda Corp senior market analyst Craig Erlam said. “This appears to be weighing on gold.”
Still, the precious metal is being supported by haven demand amid Russia’s war in Ukraine and rising inflation.
A Fed anecdotal survey showed that inflationary pressures have remained strong, clouding the outlook for future growth.
Gold prices are proving resilient — gaining more than 6 percent this year — as political and economic risks push investors toward the haven asset.
That is supporting purchases through gold-backed exchange-traded funds, which have seen holdings rise since last year, initial data compiled by Bloomberg showed.
Gold for June delivery fell US$13.90 to US$1,934.30 an ounce, declining 2.06 percent weekly.
Other commodities:
‧Silver for May delivery fell US$0.36 to US$24.46 an ounce, losing 4.82 percent on the week.
‧May copper fell US$0.12 to US$4.58 a pound, down 2.97 from a week earlier.
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