Gold Rises as U.S. Dollar Falls, 10-Year Treasury Note Reaches 3%

Investing.com – Gold was higher on Tuesday, as the U.S. dollar fell and U.S. Treasury yields rose.

Comex for June delivery were up 0.54% to $1,331.10 a troy ounce as of 10:18 AM ET (14:18 GMT).

The price of bouillon was supported by a slightly weaker greenback. The , which measures the greenback’s strength against a basket of six major currencies, fell 0.10% to 90.60.

Gold is denominated in the U.S. currency and becomes more expensive for holders of other currencies when the dollar rises.

The dollar paused after rising to an overnight high of 90.84, its strongest level since March 1, as U.S bond yields surged. Bond yields have risen to their highest levels in four years, as inflation has added to expectations of continued rate hikes from the Federal Reserve.

The yield on the benchmark on Tuesday, at 3.00. The United States 2-Year note rose to 2.487, a level not seen since September 2008.

Expectations of higher interest rates tend to boost the dollar by making the currency more attractive to yield-seeking investors.

Higher rates are a negative for gold as the precious metal, which does not pay interest, struggles to compete with yield-bearing assets when rates rise.

Gold had recently been under pressure from improvements in geopolitical tensions. North Korea has frozen its nuclear testing and the White House has extended its deadline on possible sanctions against Russia.

The precious metal is often sought by investors as a store of value in times of market turmoil and political uncertainty and tends to decline as investor confidence returns.

Elsewhere on the Comex, were up 0.68% to $16.700 a troy ounce. Among other precious metals, rose 0.70% to $928.90, while slumped 1.42% to $965.60 an ounce. futures increased 1.33% to $3.152 a pound.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.