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U.S. benchmark yields near one-month high
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Rising yields lift dollar
(Updates prices)
By Deep Kaushik Vakil
April 19 (Reuters) - Gold prices fell below the key
$2,000 level on Wednesday as U.S. yields marched higher, with
investors turning sceptical about potential U.S. rate cuts later
this year.
Spot gold was down 0.5% at $1,994.02 per ounce by
1:40 p.m. ET (1740 GMT), having shed as much as 1.8% to a
two-week low of $1,969.09 earlier in the session. U.S. gold
futures settled down 0.6% at $2,007.30.
"Once gold breached that $2,000 mark, there were a lot of
stop losses that were triggered," said Phillip Streible, chief
market strategist at Blue Line Futures in Chicago.
"Anytime you get earnings, you get a lot of people chasing
individual stocks and that could also cause them to not invest
so much in metal." The dollar strengthened 0.2%, underpinned by U.S. yields
climbing to a near one-month high, with markets now pricing in
an 85% chance of a 25-basis point rate hike at the Federal
Reserve's May 2-3 meeting, according to CME's FedWatch tool. St. Louis Fed chief James Bullard said on Tuesday that the
U.S. central bank should continue raising interest rates as
recent data shows inflation remains persistent while the broader
economy seems poised to continue growing, even if slowly.
A stronger dollar weighs on overseas demand for
greenback-priced gold, while higher rates blunt non-yielding
bullion's appeal.
Rate-hike expectations for the (Fed's) May meeting have
risen, which has pressured gold back below $2,000, at least in
the short term, said Standard Chartered analyst Suki Cooper.
Markets will scan more upcoming remarks by Fed officials
this week, ahead of a blackout period that starts on April 22
before the central bank's May meeting.
Silver rose 0.2% to $25.27 per ounce, platinum gained 0.7% to $1,089.73, while palladium was mostly flat
at $1,608.47.
(Reporting by Deep Vakil in Bengaluru; Editing by Sherry
Jacob-Phillips and Shounak Dasgupta)
