Gold reversed course on Tuesday, climbing towards last week s 4-1/2-month peak, supported by a weaker dollar and bond yields after Federal Reserve officials affirmed their support to keep monetary policy accommodative for some time. Spot gold was up 0.2% to $1,885.47 per ounce by 0724 GMT, after falling as much as 0.5% earlier in the session. US gold futures edged 0.1% higher to $1,886.50. Weak dollar, rebound in investment demand and no major threat of tapering in near term from the US Federal Reserve are major reasons for gold achieving $1,885 recently, said Jigar Trivedi, commodities analyst at Mumbai-based broker Anand Rathi Shares. The dollar index slipped 0.3% to its lowest since Jan. 7 against its rivals, making gold less expensive for holders of other currencies. [US/] [USD/]
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5/25/2021 8:55:47 AM GMT | By Anil Panchal
Gold trims Asian session losses but still in the red for second consecutive day.
US Treasury yields remain depressed for fourth day, inflation expectations recover.
Fedspeak defends easy money policies despite disagreement over inflation fears.
US data, Fed remain as the key catalysts.
Update: Gold extended its directionless price move for the third consecutive session and remained confined in a range around the $1,880 level, or just below multi-month lows touched last week. Investors have been scaling back their expectations for an earlier than anticipated Fed lift-off amid easing fears about runaway inflation in the US. This was evident from the ongoing decline in the US Treasury bond yields, which was seen as a key factor that acted as a tailwind for the non-yielding gold.
FUNDAMENTALS U.S. gold futures fell 0.3% to $1,879 per ounce. The dollar languished near four-month lows against major currencies, making gold cheaper for other currency holders. [USD/] U.S. Treasury long-dated yields fell to two-week lows after a few Federal Reserve officials affirmed their support to keep monetary policy accommodative for some time. [US/] St. Louis Fed President James Bullard said he expects the inflation rate to be above 2% both this year and the next but several Fed officials, including Bullard, continued to support the central bank s policy in separate remarks. Some investors view gold as a hedge against higher inflation.