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October 18 (Reuters) – Gold prices rose slightly on Monday, making up for some losses after a steep sell-off in the previous session as US bond yields and the dollar fell, restoring some of the metal’s appeal.
BASICS
* Spot gold XAU = rose 0.2% to $ 1,770.26 an ounce by 202 GMT after falling 1.6% on Friday.
* US gold futures GCv1 rose 0.1% to $ 1,770.50.
* Benchmark 10 year US Treasury bond yields US10YT = RR after rising to a high of 1.5904% on Monday, reducing the opportunity cost of non-profitable gold. US/
* Treasury bond yields rose sharply on Friday after data showed US retail sales rose unexpectedly in September, bolstering expectations for earlier than expected Federal Reserve rate hikes.
* Also supports gold bars, the dollar index = USD slipped 0.6% from last week’s highs in 2021 as investors believe that while inflation may favor the Fed’s rate hikes, other central banks may need to be more aggressive during the tightening cycle.USD /
* Bank of England Governor Andrew Bailey sent a new signal on Sunday that the UK central bank is preparing to hike rates as inflation risks rise.
* Gold is often viewed as a hedge against inflation, although reduced incentives and rate hikes will drive government bond yields higher and increase the opportunity cost of holding unprofitable precious metals.
* As an indication of sentiment, SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.3% on Friday from 982.72 tons on Thursday to 980.1 tons.
* China’s economy grew more slowly than expected in the third quarter, official data showed on Monday.
* Spot silver XAG = rose 0.2% to $ 23.34 an ounce while platinum XPT = fell 0.4% to $ 1,050.80 and palladium XPD = fell 0.7% to $ 2,059.18.
DATES / EVENTS (GMT)
1315 U.S. industrial production Sept.
(Reporting by Nakul Iyer in Bengaluru; editing by Rashmi Aich)
(([email protected]; within the US +1 646 223 8780, outside the US +91 80 6749 0417; Reuters Messaging: [email protected]))
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
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