Gold Prices Move Lower as 10-year Treasury Yield Tops 2.9%

Investing.com – Gold prices moved lower on Thursday, as the dollar wallowed around the unchanged mark and yields on U.S. Treasuries rose.

Comex fell $2.60, or around 0.2%, at $1,350.90 a troy ounce by 10:23AM ET (14:23GMT), while the , which measures the greenback’s strength against a trade-weighted basket of six major currencies, slipped 0.04% to 89.31.

The yield on the 10-year Treasury topped on Thursday, a day after the hit its highest level since September 2008.

The move lower in gold, which does not pay interest, may be due to its inability to compete with yield-bearing fixed income.

Economic data released on Thursday gave a mixed reading, as dipped less than expected. Still, the U.S. economy is still considered to be at or near full employment with the jobless rate at a 17-year low of 4.1%.

On the positive side, the unexpectedly increased as firms continued to be optimistic about the outlook for manufacturing activity.

Earlier on Thursday, Federal Reserve governor delivered a speech suggesting that it was due to rising asset prices and leverage. Although Brainard mostly steered clear of monetary policy, she suggested that inflation was well-anchored by some signs of imbalances.

Fed governor delivered his semi-annual testimony on bank regulation to the Senate on Thursday, in a repeat of the comments delivered to the House on Tuesday. No comments were made on monetary policy.

Cleveland Fed president could offer some more relevant clues to the future path of interest rates when she delivers remarks on the outlook and monetary policy at a conference scheduled for 6:45PM ET (22:45GMT) .

Traders are currently pricing in around a 100% chance of the next rate hike in June, according to Investing.com’s . Odds of a third rate hike by December was seen at about 90%.

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