PRECIOUS-Gold rises as U.S. dollar, Treasury yields retreat

  • 5/3/2021
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* Investors await raft of U.S. economic data this week * Dollar eases off highest level in nearly two weeks * Gold may test a support at $1,752/oz - technicals (Updates prices) By Sethuraman N R May 3 (Reuters) - Gold prices firmed on Monday, helped by a pullback in the U.S. dollar and Treasury yields, while deficit-stricken palladium held firm after surpassing the $3,000-per-ounce level in the prior session. Spot gold gained 0.6% at $1,779.31 per ounce by 1150 GMT, with volumes expected to be low due to public holidays in China, Japan and Britain. U.S. gold futures rose 0.7% to $1,780.40 per ounce. "We have had a couple of attempts to the downside, which have been forcefully rejected. For now, there"s still potential for the upside. But the market is completely lacking confidence and proper input to determine a direction," said Ole Hansen, head of commodity strategy at Saxo Bank. "(The) inflation theme is very much relevant, and as long as we have concerns about inflation picking up faster than anticipated by central banks, there is an underlying bid in the gold market." Benchmark U.S. 10-year Treasury yields retreated after hitting their highest in nearly two weeks last week, while the dollar index slipped 0.2%. Lower bond yields reduce the opportunity cost of holding non-interest bearing gold and a cheaper dollar raises gold"s appeal for other currency holders. Traders will be watching out for U.S. manufacturing surveys due on Wednesday and April labour market numbers on Friday for further clues about recovery in the world"s largest economy. On the technical front, spot gold may test a support at $1,752 per ounce, a break below which could cause a fall to $1,738, according to Reuters technical analyst Wang Tao. Elsewhere, auto-catalyst metal palladium rose 0.8% to $2,957.70 per ounce, after hitting an all-time high of $3,007.73 per ounce on Friday over supply concerns. Silver was up 1.1% at $26.19 per ounce. Platinum fell 0.1% to $1,196.82 an ounce. (Reporting by Nallur Sethuraman in Bengaluru; Editing by Subhranshu Sahu and Amy Caren Daniel) Our Standards: The Thomson Reuters Trust Principles.

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