PRECIOUS-Gold gains ground as yields, dollar dip after Fed holds rates

  • 4/28/2021
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* Gold hits near two-week low of $1,762/oz * Palladium slips from record highs hit on Tuesday (Recasts, adds comments, updates prices) By Eileen Soreng April 28 (Reuters) - Gold prices gained on Wednesday, as the dollar and U.S. Treasury yields eased after the U.S. Federal Reserve kept interest rates unchanged and re-affirmed its accommodative policy to support the economic recovery. Spot gold rose 0.2% to $1,780.56 per ounce by 3:28 p.m. EDT (1928 GMT), having earlier dipped to its lowest since April 16 at $1,762. U.S. gold futures settled down 0.3% at $1,773.9. The Fed held interest rates and its bond-buying program steady after its two-day policy meet, nodding to the economy"s growing strength but gave no indication it was ready to reduce its support for the economic recovery. "Bonds rallied, USD retreated sharply, and gold rallied to highs of the day after a test of the lows of the range earlier after Powell took great pains to emphasize there will be no tapering in Fed"s accommodative policy," said Tai Wong, head of metals derivatives trading at BMO. "The Fed has probably set gold up for a test of the top of the $1,800-$1,810 range, but it is unclear whether there is enough momentum to break above without a deeper drawdown in the dollar," he added. Benchmark U.S. 10-year Treasury yields reversed course after rising to a two-week high earlier, raising bullion"s appeal. The dollar also fell, making the bullion cheaper for holders in other currencies. While gold is considered a hedge against the inflation that could follow widespread stimulus, elevated Treasury yields have dulled non-yielding bullion"s appeal and has pushed gold down 6% so far this year. Goldman Sachs, meanwhile, sees gold at $2,000 an ounce over the next six months and said it was too early for bitcoin to compete with gold for safe-haven demand. Elsewhere, palladium inched 0.1% lower to $2,939.83 per ounce, having hit an all-time high of $2,962.50 on Tuesday. Silver was flat at $26.23 per ounce, after reaching a low since April 21 at $25.80. Platinum eased 0.4% to $1,223.38 per ounce. (Reporting by Eileen Soreng and Nakul Iyer in Bengaluru; Editing by Emelia Sithole-Matarise, Alexander Smith and Toby Chopra)

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