Gold Prices Rise From Session Lows as Dollar, Bond Yield Rally Cool

Investing.com – Gold prices traded roughly unchanged on Thursday as the rally in bond yields and the dollar cooled, limiting downside momentum in the precious metal.

for June delivery on the Comex division of the New York Mercantile Exchange fell by $1.40, or 0.11%, to $1,290.20 a troy ounce.

Gold prices recovered from a move lower to $1,284.30 as struggled to add to gains, retreating from session highs, dragging the lower to trade just above breakeven against its rivals.

The fall in bond yields on Thursday comes despite data pointing to signs of rising inflation that could prompt the Federal Reserve to adopt a faster pace of monetary policy tightening, ensuring the economy does not overheat.

The Philadelphia Fed said Thursday its rose to a reading of 34.4, from 23.2 in May. That was the highest reading since 1973.

The prices paid component of the Philly Fed data ticked lower but the prices received component rose to a fresh cycle high, suggesting that the pass-through of higher prices to consumers was starting to take shape, leading to a potential rise in inflation, RBC said.

Some analysts warned that 10-year treasury bonds prices – which trade inversely to yields – could come under pressure, sending yields higher, as supported remains limited.

“The break in 3.10% overnight and a yield high of 3.122% means that there are few significant hurdles for 10-year treasury bonds sell off further until support at 3.21-3.24%,” Bank of Montreal said Thursday.

Gold is sensitive to moves higher in both bond yields and the U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding gold as it pays no interest.

In other precious metal trade, rose 0.57% to $16.47 a troy ounce, while rose 0.19% to $891.50 an ounce.

rose 0.47% to $3.09.

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