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Gold eases on firmer US dollar, yields ahead of central bank meetings

Gold eases on firmer US dollar, yields ahead of central bank meetings

27 Oct 2021

Gold prices eased on Wednesday, retreating from the key $1,800 mark, as a stronger U.S. dollar and elevated bond yields dented bullion’s safe-haven appeal ahead of key central bank meetings.


* Spot gold was down 0.2% at $1,788.66 per ounce, as of 0157 GMT. U.S. gold futures dropped 0.2% to $1,790.60.

* The precious metal rallied to an over one-month peak late last week, but has retreated 1.2% from those levels.

* Benchmark 10-year U.S. Treasury yields rose, increasing non-interest bearing gold’s opportunity cost.

* The dollar also steadied close to a one-week high hit in the previous session, making gold less appealing for buyers holding other currencies. USD/

* Market participants now await Thursday’s Bank of Japan (BOJ) and European Central Bank (ECB) meetings.

* The BOJ is set to maintain its massive stimulus programme on Thursday and slash this year’s inflation forecast in a sign it has no intention to follow other central banks eyeing exits from crisis-mode policies.

* Gold is often considered an inflation hedge, though reduced stimulus and interest rate hikes push government bond yields up, translating into a higher opportunity cost for holding bullion.

* U.S. consumer confidence unexpectedly rose in October as concerns about high inflation were offset by better labour market prospects, suggesting economic growth was picking up after a turbulent third quarter.

* China’s net gold imports via Hong Kong jumped nearly 60% in September to their highest level in five months, data from the Hong Kong Census and Statistics Department showed.

* Indicative of sentiment, SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.2% to 979.81 tonnes on Tuesday from 978.07 tonnes on Monday.

* Spot silver fell 0.8% to $23.95 per ounce. Platinum eased 0.7% to $1,020.61 and palladium edged 0.3% lower to $2,005.51.

DATA/EVENTS (GMT, Oct) 1230 US Durable Goods Sept