Gold prices claw back as US Treasury yields retreat

Gold prices firmed on Monday, after posting a 6% drop last week, as a retreat in U.S. Treasury yields boosted the allure of the non-yielding metal.

Fundamentals
* Spot gold was up 0.5% at $1,772.34 per ounce, as of 1004 GMT. Last week, bullion prices posted their worst week since March 2020 on the U.S. Federal Reserve‘s hawkish outlook.

* U.S. gold futures edged 0.2% higher to $1,772 per ounce.

* The benchmark U.S. Treasury yields fell to their lowest since March 3, reducing the opportunity cost of holding bullion, which pays no return.

* The U.S. dollar held near multi-month peaks against other major currencies on Monday, after the Fed surprised markets last week by signalling it would raise interest rates and end emergency bond-buying sooner than expected.

* Minneapolis Federal Reserve President Neel Kashkari said on Friday he wants to keep the U.S. central bank’s benchmark short-term interest rate near zero at least through the end of 2023 to allow the labour market to return to its pre-pandemic strength.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.1% to 1,053.06 tonnes on Friday from 1,041.99 tonnes on Thursday.

* Gold purchases in India ticked up last week after a decline in local rates, although dealers cautioned that demand is unlikely to return to normal levels soon.

* Russia’s gold reserves stood at 73.7 million troy ounces, as of the beginning of June, the central bank said on Friday.

* Silver was up 0.6% at $25.95 per ounce, palladium climbed 1% to $2,490.93, while platinum rose 0.4% to $1,037.89.

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