PRECIOUS-Gold steadies below seven-week peak as U.S. yields rebound

  • 4/20/2021
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* Benchmark 10-year U.S. Treasury yields rise above 1.6% * Dollar drops to near seven-week low * Spot gold may slide into $1,744-$1,758/oz range - technicals (Recasts, update prices) By Brijesh Patel April 20 (Reuters) - Gold eked out some gains on Tuesday buoyed by a weaker dollar, although prices were hovering below Monday"s seven-week high as a rebound in U.S. Treasury yields weighed on bullion"s appeal. Spot gold was up 0.1% at $1,771.53 per ounce by 0447 GMT, after hitting $1,789.77 on Monday, its highest since Feb. 25. U.S. gold futures rose 0.1% to $1,772.40 per ounce. "Gold came off yesterday"s high against a backdrop of rising yields. But the rise in yields didn"t echo into the dollar. The greenback"s soggy performance is supportive for gold," said DailyFX currency strategist Ilya Spivak. The dollar index dropped to a near seven-week low against its rivals, making gold less expensive for holders of other currencies. However, benchmark 10-year U.S. Treasury yields rose above 1.6% after hitting a five-week low last week, increasing the opportunity cost of holding non-yielding bullion. U.S. President Joe Biden met on with a bipartisan group of lawmakers who have all served as governors or mayors, as the White House seeks a deal on his over $2 trillion jobs and infrastructure proposal. Gold is seen as a hedge against inflation that could follow stimulus measures, but higher Treasury yields have dulled some of the appeal of the non-yielding commodity this year. "As it comes to inflation, the more inflation we get and the less the Federal Reserve is able to ignore that, the worst for gold it is... Technically, gold"s trend is still pointing lower," DailyFX"s Spivak said. Although the U.S. central bank has reiterated its stance to keep monetary policy accommodative some time, Fed officials have said any spike in inflation is likely to be temporary. Spot gold may slide more into a range of $1,744-$1,758 per ounce, following its failure to break a resistance at $1,785, according to Reuters technical analyst Wang Tao. Silver gained 0.5% to $25.93 per ounce, palladium dropped 0.9% to $2,787.18 and platinum was steady at $1,206.28. (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu)

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