Gold prices eased on Wednesday to their lowest point in 1-1/2 months, as high Treasury yields and
a firm dollar outweighed optimism over a potential U.S.-Iran
peace agreement.
Spot gold was down 0.2% at $4,472.09 per ounce, as of
0615 GMT, having touched its weakest level since March 30. U.S.
gold futures for June delivery lost 0.8% to $4,475.
“Gold is running out of puff somewhat against this backdrop
of rising yields, and a dollar which has a spring in its step
courtesy of the hawkish shift in the rates outlook,” said Tim
Waterer, chief market analyst at KCM Trade.
The dollar hovered at a six-week high, making
greenback-priced bullion more expensive for holders of other
currencies.
Benchmark 10-year US Treasury yields were
steady at a more than one-year high, raising the opportunity
cost of holding non-yielding gold.
U.S. signals on Iran remained mixed, with President Donald
Trump warning Washington may still need to strike Tehran, while
Vice President JD Vance said both sides were making progress and
did not want a return to conflict.
Philadelphia Federal Reserve Bank President Anna Paulson
said the current level of interest rates is appropriate for the
moment, putting downward pressure on inflation at a time when
price pressures remain elevated.
She, however, said it was “healthy” that investors had begun
considering scenarios where rates might need to rise.
The US Federal Reserve will avoid cutting rates this year,
according to most economists polled by Reuters who largely
pushed long-held calls for reductions into next year on hopes
the current inflation flare-up is temporary.
Investors are waiting for minutes from the Fed’s April
policy meeting, due later in the day, to gauge the U.S. central
bank’s monetary policy outlook.
Spot silver rose 1.1% to $74.64 per ounce, platinum
gained 0.2% to $1,925.30, and palladium was up
0.9% to $1,366.