Gold prices hover near 2-week low as US dollar rallies on economic recovery

(Reuters) – Gold prices slipped on Tuesday, around a more than two-week low hit in the previous session, pressured by a stronger U.S. dollar and higher Treasury yields on optimism around a quick economic recovery as vaccinations gain momentum.

FUNDAMENTALS

* Spot gold fell 0.1% to $1,710.03 per ounce by 0141 GMT. U.S. gold futures declined 0.2% to $1,711.10 per ounce.

* Gold fell to $1,704.90 per ounce on Monday, the lowest level since March 12.

* The dollar climbed to a one-year high against the yen on Tuesday as accelerating vaccinations and massive stimulus in the U.S. stoked inflation concerns.

* Concerns about a potential fallout of a hedge fund’s default on margin calls also elevated the greenback’s safe-haven appeal. Losses at Archegos Capital Management, run by former Tiger Asia manager Bill Hwang, sparked a fire sale of stocks on Monday, including that of some U.S. tech companies.

* Asian shares were set to open higher on Tuesday, as investors shook off earlier worries

* Longer-dated Treasury yields rose as investors banked on vaccine roll-out in the United States and expectations that President Joe Biden’s infrastructure initiative could bolster economic growth and debt issuance.

* The Federal Reserve is “a long way from raising interest rates at this point,” Fed Governor Christopher Waller said on Monday, reinforcing hopes that the central bank is ready to remain dovish as long as virus woes linger.

* British consumers reined in their borrowing at the fastest annual pace on record in February, according to Bank of England data.

* China’s factory activity was expected to have grown at a faster pace in March, a Reuters poll showed.

* Silver fell 0.3% to $24.59 and platinum was down 0.7%, at $1,167.51

* Palladium was little changed at $2,529.76, having slid 5.5% in the last session.

(Reporting by Diptendu Lahiri in Bengaluru; Editing by Shailesh Kuber)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor