Gold hovers near 2-week low as US dollar rallies

Gold prices slipped on Tuesday, around a more than two-week low hit in the previous session, pressured by a stronger US dollar and higher Treasury yields on optimism around a quick economic recovery as vaccinations gain momentum.

FUNDAMENTALS

Spot gold fell 0.1% to $1,710.03 per ounce by 0141 GMT. US gold futures declined 0.2% to $1,711.10 per ounce.

Gold fell to $1,704.90 per ounce on Monday, the lowest level since March 12.

The dollar climbed to a one-year high against the yen on Tuesday as accelerating vaccinations and massive stimulus in the US stoked inflation concerns.

Concerns about a potential fallout of a hedge fund's default on margin calls also elevated the greenback's safe-haven appeal.

Losses at Archegos Capital Management, run by former Tiger Asia manager Bill Hwang, sparked a fire sale of stocks on Monday, including that of some US tech companies.

Asian shares were set to open higher on Tuesday, as investors shook off earlier worries.

Longer-dated Treasury yields rose as investors banked on vaccine roll-out in the United States and expectations that President Joe Biden's infrastructure initiative could bolster economic growth and debt issuance.

The Federal Reserve is "a long way from raising interest rates at this point," Fed Governor Christopher Waller said on Monday, reinforcing hopes that the central bank is ready to remain dovish as long as virus woes linger.

British consumers reined in their borrowing at the fastest annual pace on record in February, according to Bank of England data.

China's factory activity was expected to have grown at a faster pace in March, a Reuters poll showed.

Silver fell 0.3% to $24.59 and platinum was down 0.7%, at $1,167.51

Palladium was little changed at $2,529.76, having slid 5.5% in the last session.