Gold Remains Firm Amid Lower Treasury Yields and Dollar Strength

Gold firmed on Wednesday supported by lower Treasury yields but the dollar’s strength, with more interest rate hikes in the offing and optimism about a U.S. debt deal kept bullion on course for its first monthly dip in three.

Spot gold was up 0.4% at $1,967.29 per ounce by 1209 EDT (1609 GMT) on weaker-than-expected Chicago purchasing managers’ index (PMI)data, before paring some gains on stronger U.S. jobs data.

It has lost nearly 1.1% this month and over $100 from near-record highs scaled earlier in May.

U.S. gold futures rose 0.5% at $1,987.20.

“We’ve had kind of a push-pull effect,” amid support from lower yields and pressure from the dollar, said David Meger, director of metals trading, High Ridge Futures. [US/] [USD/]

“With the job’s data relatively strong, concern about the possibility of further rate hikes would obviously have a tendency to pressure gold… and yet on the other side, we have the PMI data pulling in the opposite direction.”

The dollar index headed for a monthly gain, making bullion less attractive to overseas buyers.

Investors priced in a in 68.8% chance of a 25 basis point hike in the Federal Reserve’s June meeting versus 60% before the jobs data.

High interest rates dim appeal for zero-yield gold.

But key support around $1,950 could fuel momentum trade to push gold back to $2,000, said Edward Moya, senior market analyst at OANDA.

Traders also focussed on developments around the U.S. debt ceiling, with the U.S. House of Representatives due to vote on a bill to lift the limit.

Silver rose 1.3% to $23.52 per ounce, platinum fell 1.7% to $996.68, while palladium slipped 2.4% at $1,366.67. All three were set for a monthly drop.

Russia’s Nornickel saw the global palladium market swinging to a surplus in 2024 from a deficit in 2023 as recycling outpaces a demand recovery.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – Reuters)