Finance

Gold flat as dollar strength counters weaker U.S. bond yields

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Gold prices were flat on Thursday, as an

elevated dollar weighed on greenback-priced bullion and

countered support from lower Treasury yields, with the metal’s

outlook already dulled by an aggressive Federal Reserve stance

on inflation.

FUNDAMENTALS

* Spot gold held its ground at $1,816.63 per ounce at

0047 GMT. U.S. gold futures edged 0.1% lower to

$1,814.10.

* The U.S. dollar rose on Wednesday, snapping a

three-session losing streak, as concerns about the outlook for

global economic growth and rapid inflation knocked sentiment a

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day after Fed Chair Jerome Powell struck a more hawkish tone.

* A stronger dollar makes gold less attractive for buyers

holding other currencies.

* U.S. Treasury yields fell on Wednesday, tracking losses on

Wall Street, after poor U.S. housing data added to growing

slowdown concerns amid aggressive monetary tightening by the

Fed, buoying demand for zero-yield gold.

* Two U.S. central bankers say they expect the Fed to

downshift to a more measured pace of policy tightening after

July as it seeks to quell inflation without lifting borrowing

costs so high that they send the economy into recession.

* Although seen as an inflation hedge, bullion is sensitive

to rising U.S. short-term interest rates and bond yields, which

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raise the opportunity cost of holding it.

* British inflation surged last month to its highest annual

rate since 1982, pressuring finance minister Rishi Sunak to

offer more help for households and the Bank of England to keep

raising interest rates despite a risk of recession.

* Spot silver fell 0.2% to $21.35 per ounce, platinum

dropped 0.8% to $927.77, and palladium slipped 1%

to $1,996.92.

DATA/EVENTS (GMT)

0130 Australia Unemployment Rate April

1230 US Initial Jobless Clm Weekly

1230 US Philly Fed Business Indx May

1400 US Existing Home Sales April

(Reporting by Bharat Govind Gautam in Bengaluru; Editing by

Sherry Jacob-Phillips)

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