Gold prices edge higher as pullback in U.S. dollar lifts appeal
Thu May 06 2021
Lucy Harlow (3715 articles)

Gold prices edge higher as pullback in U.S. dollar lifts appeal

Gold prices ticked up on Wednesday, lifted by a retreat in the dollar, although gains were kept in check after U.S. Treasury Secretary Janet Yellen said interest rates may need to rise.

Spot gold was up 0.25% at $1,782 per ounce. U.S. gold futures rose 0.4% to $1,783.

“A pullback in the dollar more broadly, after last night’s strong selling has been supportive for gold prices,” IG Market analyst Kyle Rodda said.

“There is going to be a reasonably strong resistance zone between $1,800 and $1,810, if prices happen to push through there, you might see some buyers on the other side of that.”

The dollar index was down 0.1% against its rivals after scaling a near two-week peak in the previous session.

Gold prices fell more than 1% on Tuesday after Yellen said she sees no inflation problem brewing, downplaying earlier comments that rate hikes may be needed to stop the economy overheating as President Joe Biden’s spending plans boost growth.

Higher interest rates dull gold’s appeal as it increases the opportunity cost of holding non-yielding bullion.

Investor focus is expected to shift to April payrolls data due on Friday for further cues on the health of the U.S. economy.

So far, Federal Reserve Chair Jerome Powell has argued the labor market is still far short of where it needs to be to start discussing tapering asset buying.

Elsewhere, palladium futures rose 0.7% to $2,998 per ounce after hitting an all-time high of $3,017.18 in the previous session, driven by concerns of a shortage of the metal.

Supply shortage worries for the metal were worsened after top producer Nornickel announced disruptions at two Siberian mines due to waterlogging in March.

Silver slipped 0.5% to $26.42, while platinum eased 0.3% to $1,228, moving further away its highest in more than two months touched on Tuesday.

Tags Gold, Silver
Lucy Harlow

Lucy Harlow

Lucy Harlow is a senior Correspondent who has been reporting about Commodities, Currencies, Bonds etc across the globe for last 10 years. She reports from New York and tracks daily movement of various indices across the Globe