© Reuters. FILE PHOTO: Employees cast ingots of 99.99% pure gold at the Krastsvetmet non-ferrous metal plant in Krasnoyarsk, Siberia, Russia, March 10, 2022. REUTERS / Alexander Manzyuk
By Bharat Gautam
(Reuters) – Gold prices fell to their lowest in nearly two weeks on Wednesday, as a stronger U.S. dollar and Treasury yields continued to weigh on demand for gold bars.
fell 0.4% to $1,941.40 an ounce by 0741 GMT, having hit its lowest level since April 8. The US fell 0.7% to $1,944.80.
On Tuesday, prices fell as much as 1.8% as dollar strength and benchmarks eclipsed safe-haven inflows into the metal.
“With the U.S. dollar remaining firm for now and with China cutting its prime rate for 1- and 5-year loans, it looks like a squeeze,” said OANDA senior analyst Jeffrey Halley. Long-term tight (for gold) continues in Asia.”
The dollar held near recent highs, making greenback-denominated gold less attractive to holders of other currencies. [USD/]
China unexpectedly stabilized its benchmark lending rate on Wednesday, with markets suggesting the move suggests caution in adopting more easing measures as the economy slows due to a slowdown in growth. COVID-19 lockdown.
U.S. Treasury yields hovered near multi-year highs, as investors braced for a drastic rate hike by the Federal Reserve. [US/]
Gold is very sensitive to rising short-term interest rates and US bond yields, which increases the opportunity cost of holding unprofitable bullion.
On Monday, gold was close to hitting the critical $2,000/ounce level but has since come under some pressure.
Underlying demand is gold’s ability to hedge against many risks, namely war in Ukraine, soaring global inflation, Fed hawks, and a rising inflation, UBS analysts said. subsequent inversion of the 2-year/10-year US Treasury yield curve. in a single note.
Spot silver fell 0.8% to $24.96 an ounce and platinum fell 1.5% to $976.47, while palladium rose 0.3% to $2,379.85.
