Gold slips as dollar firms, U.S. Treasury yields steady

Dec 29 (Reuters) – Gold edged lower on Wednesday in slim trading as dollar strengthened and U.S. Treasury yields steadied after falling earlier in the session, though prices remained above the key level of $1,800 per ounce.

Spot gold was last down 0.2% at $1,802.67 per ounce by 0821 GMT, hovering near the intraday low of the previous session when bullion scaled a one-month high on signs of rising inflation before reversing course due to a firmer dollar.

U.S. gold futures dropped 0.4% to $1,803.00.

“Gold’s attempts to stage a meaningful recovery remain unconvincing, with traders cutting long positions at the very first sign of trouble intraday,” Jeffrey Halley, a senior market analyst at OANDA, said in a note.

Dollar-priced bullion tends to be sensitive to moves in the safe-haven currency, with a higher dollar making gold more expensive to overseas buyers and vice versa.

Benchmark 10-year U.S. Treasury yields steadied after spending much of the session so far slightly lower. Higher yields raise the opportunity cost of holding non-interest paying gold.

Asian stocks slipped, following a mixed Wall Street session as the region’s investors positioned their portfolios for the new year and continued to grapple with increasing global numbers of Omicron coronavirus cases.

Gold could strengthen as “a lot of economists are downgrading growth expectations in the U.S., and arguably we could have a softer end to the year than a lot of people had expected,” said Stephen Innes, managing partner at SPI Asset Management.

Analysts have said gold trading is likely to remain thin and range-bound this week.

Spot silver was up 0.5% at $23.11 an ounce, platinum was 0.8% lower at $968.50, and palladium dropped 0.3% to $1,983.68.

Reporting by Bharat Govind Gautam and Seher Dareen in Bengaluru; Editing by Vinay Dwivedi

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