Gold steady with dollar strength, yields inconsistent with Ukraine’s problems

by Asha Cestella

(Reuters) – Gold prices stabilized on Monday as dollar and Treasury yields stabilized in the wake of a strong US jobs report that raised expectations for a rate hike, while the worsening Ukraine crisis supported safe-haven requests to buy bullion.

Spot gold was little changed at $1,928.36 an ounce by 0700 GMT. US gold futures rose 0.2% to $1,928.10.

“While the conflict in Eastern Europe may provide a modest tailwind for gold prices on dips, it is now very clear that key pricing inputs for gold have been impacted by the impact of higher US yields and a stronger US dollar,” an OANDA official said. Analyst Jeffrey Haley added that Asian trade was quiet due to the China holiday.

A strong dollar makes gold less attractive to other currency holders, while higher returns increase the opportunity cost of holding unpaid bullion.

The dollar had a strong start to the week while Treasury yields were also higher, with the monthly US jobs report indicating a strong job market and likely to keep the Fed on track to maintain its hawkish stance on policy. [USD/] [US/]

US jobs data showed the unemployment rate fell to a new two-year low of 3.6% and wages reaccelerated, causing the Federal Reserve to raise interest rates by 50 basis points in May.

Investors are looking forward to any discussion of a 50 basis point rate hike when the Federal Reserve releases the minutes of its March meeting on Wednesday.

Meanwhile, the German Defense Minister said, on Sunday, that the European Union should discuss banning Russian gas imports, after Ukrainian and European officials accused Russian forces of committing atrocities.

The spot price of gold may drop to $1898, as it broke the support at $1,924 an ounce, according to Reuters technical analyst Wang Tao. [TECH/C]

Spot silver prices rose 0.8 percent to $24.81 an ounce, platinum increased 0.5 percent to $990.38, while palladium rose 2.1 percent to $2,323.42.

(Reporting by Asha Cestla in Bengaluru; Editing by Sherry Jacob Phillips and Jason Neely)

(The title and image for this report may have been reformulated only by the Business Standard staff; the rest of the content is automatically generated from a shared feed.)

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