AGL 40.00 Decreased By ▼ -0.16 (-0.4%)
AIRLINK 129.53 Decreased By ▼ -2.20 (-1.67%)
BOP 6.68 Decreased By ▼ -0.01 (-0.15%)
CNERGY 4.63 Increased By ▲ 0.16 (3.58%)
DCL 8.94 Increased By ▲ 0.12 (1.36%)
DFML 41.69 Increased By ▲ 1.08 (2.66%)
DGKC 83.77 Decreased By ▼ -0.31 (-0.37%)
FCCL 32.77 Increased By ▲ 0.43 (1.33%)
FFBL 75.47 Increased By ▲ 6.86 (10%)
FFL 11.47 Increased By ▲ 0.12 (1.06%)
HUBC 110.55 Decreased By ▼ -1.21 (-1.08%)
HUMNL 14.56 Increased By ▲ 0.25 (1.75%)
KEL 5.39 Increased By ▲ 0.17 (3.26%)
KOSM 8.40 Decreased By ▼ -0.58 (-6.46%)
MLCF 39.79 Increased By ▲ 0.36 (0.91%)
NBP 60.29 No Change ▼ 0.00 (0%)
OGDC 199.66 Increased By ▲ 4.72 (2.42%)
PAEL 26.65 Decreased By ▼ -0.04 (-0.15%)
PIBTL 7.66 Increased By ▲ 0.18 (2.41%)
PPL 157.92 Increased By ▲ 2.15 (1.38%)
PRL 26.73 Increased By ▲ 0.05 (0.19%)
PTC 18.46 Increased By ▲ 0.16 (0.87%)
SEARL 82.44 Decreased By ▼ -0.58 (-0.7%)
TELE 8.31 Increased By ▲ 0.08 (0.97%)
TOMCL 34.51 Decreased By ▼ -0.04 (-0.12%)
TPLP 9.06 Increased By ▲ 0.25 (2.84%)
TREET 17.47 Increased By ▲ 0.77 (4.61%)
TRG 61.32 Decreased By ▼ -1.13 (-1.81%)
UNITY 27.43 Decreased By ▼ -0.01 (-0.04%)
WTL 1.38 Increased By ▲ 0.10 (7.81%)
BR100 10,407 Increased By 220 (2.16%)
BR30 31,713 Increased By 377.1 (1.2%)
KSE100 97,328 Increased By 1781.9 (1.86%)
KSE30 30,192 Increased By 614.4 (2.08%)
Markets

US yields, dollar buoy gold ahead of Powell's testimony

  • US consumer prices rose by the most in 13 years in June.
  • Dollar down 0.2% against rivals.
Published July 14, 2021

Gold prices firmed on Wednesday after getting a lift from weaker US Treasury yields and dollar, though the main focus was on Federal Reserve Chair Jerome Powell's testimony due later in the day following a robust rise in consumer prices.

Spot gold was up 0.4% at $1,814.13 per ounce, as of 0639 GMT, while US gold futures rose 0.3% to $1,814.5.

While gold has made gentle gains on the back of slightly lower US dollar and yields, it has not been enough to decisively shift momentum higher, said Jeffrey Halley, a senior market analyst at OANDA.

"Gold held up surprisingly well overnight after the CPI data propelled the dollar higher and lifted long-dated bond yields. That should give some comfort to bullish investors that gold may finally be regaining its inflation hedging tailwind."

Gold inches higher as investors shift focus to US inflation

The dollar index ticked 0.2% lower, having seen its best daily percentage gain in nearly a month on Tuesday. Benchmark 10-year yields also pulled back, which translates into lower opportunity cost of holding non-interest bearing gold.

Data on Tuesday showed US consumer prices in June rose by the most in 13 years. Focus now shifts to Powell's testimony before the Congress for any views on the rising price pressures and possible tightening of monetary policy.

Powell has repeatedly stated that higher inflation will be transitory, noting that he expected supply chains to normalize and adapt.

"I'm expecting a hawkish tone in Powell's testimony. In that case, dollar will rise and gold will fall," Jigar Trivedi, a commodities analyst at Mumbai-based broker Anand Rathi Shares said.

Falling US bond yields may signal death knell for 'reflation' stock trade

"Psychological support is at $1,800, but that will get breached very soon. I'm looking at $1,760 as a support for the next 15 days."

Gold prices slumped 7% last month after the US central bank signalled at a sooner-than-expected interest rate increase.

Elsewhere, silver gained 0.5% to $26.10 per ounce, palladium rose 0.4% to $2,838.18, and platinum was 0.6% higher at $1,111.23.

Comments

Comments are closed.