After closing the previous week in the negative territory, gold remained under modest bearish pressure. Gold prices firmed on Monday, after posting a 6% drop last week, as a retreat in U.S. Treasury yields boosted the allure of the non-yielding metal.
Spot prices for the precious metal was up 0.5% at $1,772.34 per ounce, as of 0104 GMT. Last week, bullion prices posted their worst week since March 2020 on the U.S. Federal Reserve’s hawkish outlook.
U.S. futures for the yellow metal edged 0.2% higher to $1,772 per ounce.
The benchmark U.S. Treasury yields fell to their lowest since March 3, reducing the opportunity cost of holding bullion, which pays no return.
The U.S. dollar held near multi-month peaks against other major currencies on Monday, after the Fed surprised markets last week by signaling it would raise interest rates and end emergency bond-buying sooner than expected.
Minneapolis Federal Reserve President Neel Kashkari said on Friday he wants to keep the U.S. central bank’s benchmark short-term interest rate near zero at least through the end of 2023 to allow the labor market to return to its pre-pandemic strength.
Gold Performance VS Dollar
The US dollar gathering strength mid last week pushed the yellow metal to extended its slide and lost nearly 5 percent in a two-day span to touch its lowest level in six weeks at $1,767 on Thursday. Although gold staged a correction ahead of the weekend and struggled to preserve its recovery momentum but failed and closed at $1,765.10 with a weekly loss of 5.5 percent.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.1% to 1,053.06 tonnes on Friday from 1,041.99 tonnes on Thursday.
Gold purchases in India ticked up last week after a decline in local rates, although dealers cautioned that demand is unlikely to return to normal levels soon.
Russia’s reserves for the precious commodity stood at 73.7 million troy ounces, as of the beginning of June, the central bank said on Friday.
Silver was up 0.6% at $25.95 per ounce, palladium climbed 1% to $2,490.93, while platinum rose 0.4% to $1,037.89.