PRECIOUS-Gold hits 8-month trough as U.S. Treasury yields rally
Reuters
Published Feb 26, 2021 04:39
Updated Feb 26, 2021 08:42
* Gold down 1.4% for the week, 4.8% for the month so far
* Platinum set for fourth straight monthly gain
* Palladium set to register its best month in three
(Updates prices)
By Sumita Layek
Feb 26 (Reuters) - Gold prices fell to their lowest in eight
months on Friday, and were headed for a second straight weekly
and monthly decline as brighter economic outlook and inflation
fears propped up U.S. Treasury yields.
Spot gold XAU= eased 0.1% to $1,767.81 per ounce by 0715
GMT, having earlier fallen to its lowest since June 26 at
$1,755.45. Prices were down 1.4% for the week and 4.8% for the
month so far.
U.S. gold futures GCv1 fell 0.6% to $1,765.70 on Friday.
Prices had dropped 1.9% on Thursday as benchmark U.S.
Treasury yields hit their highest since the pandemic began,
lifting the dollar. US/ USD/
"Rising inflation expectations as markets price in the
reopening of developed market economies are pushing yields
higher and pressuring gold," said OANDA senior market analyst
Jeffrey Halley.
Higher inflation boosts gold but also lifts Treasury yields,
which in turn increase the opportunity cost of holding
non-yielding bullion.
"The overall picture looks dire, gold is now in danger of a
material move lower, if yields rise again," Halley said.
Reflecting investor sentiment, holdings in the world's
largest gold-backed exchange-traded fund, SPDR Gold Trust GLD ,
fell 0.6% on Thursday to their lowest since May 2020. GOL/ETF
The U.S. Federal Reserve's comment that it is not concerned
with rising bond yields has added to gold's misery, Phillip
Futures said in a note. Silver XAG= fell 0.7% to $27.19 an ounce, set for biggest
weekly fall since mid-Jan with 1.4% decline. Palladium XPD=
dropped 0.8% to $2,382.02, but was set to register its best
month in three with over 6% gain.
Platinum XPT= eased 0.1% to $1,215.09 and was set to mark
its worst week since end-October with a 5.1% decline, but was on
track to gain for a fourth straight month, rising more than 12%.
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Written By: Reuters
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