Global Stock Markets
Gold steadied on Wednesday after its biggest one-day slide
in two-and-a-half months as investors awaited the minutes of the Federal
Reserve’s latest policy meeting later for clues on the outlook for US
interest rates.
Fresh gains in the dollar, however, kept prices under pressure, holding the metal near a one-week low.
Spot gold was at $1,328.80/oz at 10.30am GMT, little changed from late on Tuesday but off an earlier low of $1,325.20. US gold futures for April delivery were down 30c at $1,330.90/oz.
Gold slid 1.3% on Tuesday, the most on any day since December 7, as a rise in US yields boosted the dollar and weakened the appeal of non-interest bearing gold. Benchmark 10-year treasury yields
hovered near a four-year peak on Tuesday.
Yields have risen after the US Treasury Department issued more debt in anticipation of a higher deficit from last year’s tax overhaul and a budget deal that will lift federal spending over the next two years.
Stocks fell in Europe on Wednesday, while the dollar rose 0.1% against the euro as traders’ near-term focus shifted to the Fed minutes. The minutes, due to be released at 7pm GMT, will be watched for comment on inflation pressures in the world’s biggest economy, which could speed up the pace of rate hikes.
Gold is highly sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Interest in physical gold has been muted this week during the New Year holiday across much of Asia, including major consumer China.
The firm dollar and higher treasury yields are likely to keep the metal under pressure, however, it said.
On the investment side of the market, holdings at the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares, rose 3.2 tonnes on Tuesday to 827.79 tonnes.
Among other precious metals, silver was flat at $16.45/oz.
Palladium was 0.8% lower at $1,025.10 and platinum was down 0.5% to $995.10.
Fresh gains in the dollar, however, kept prices under pressure, holding the metal near a one-week low.
Spot gold was at $1,328.80/oz at 10.30am GMT, little changed from late on Tuesday but off an earlier low of $1,325.20. US gold futures for April delivery were down 30c at $1,330.90/oz.
Gold slid 1.3% on Tuesday, the most on any day since December 7, as a rise in US yields boosted the dollar and weakened the appeal of non-interest bearing gold. Benchmark 10-year treasury yields
hovered near a four-year peak on Tuesday.
Yields have risen after the US Treasury Department issued more debt in anticipation of a higher deficit from last year’s tax overhaul and a budget deal that will lift federal spending over the next two years.
Stocks fell in Europe on Wednesday, while the dollar rose 0.1% against the euro as traders’ near-term focus shifted to the Fed minutes. The minutes, due to be released at 7pm GMT, will be watched for comment on inflation pressures in the world’s biggest economy, which could speed up the pace of rate hikes.
Gold is highly sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Interest in physical gold has been muted this week during the New Year holiday across much of Asia, including major consumer China.
The firm dollar and higher treasury yields are likely to keep the metal under pressure, however, it said.
On the investment side of the market, holdings at the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares, rose 3.2 tonnes on Tuesday to 827.79 tonnes.
Among other precious metals, silver was flat at $16.45/oz.
Palladium was 0.8% lower at $1,025.10 and platinum was down 0.5% to $995.10.
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