Gold off two and half months low as US Treasury yields retreat
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Benchmark 10-year Treasury yields retreated from a near one-year peak hit on Wednesday. Lower yields reduce the opportunity cost of holding bullion, which pays no interest.
Gold prices on Thursday clawed back from the previous session's 2-1/2 month low, as a retreat in U.S. Treasury yields lifted the non-yielding bullion's appeal.
Spot gold rose 0.3% to $1,781.50 per ounce by 0807 GMT, having dropped to its lowest since Nov. 30 at $1,768.60 on Wednesday. U.S. gold futures advanced 0.4% to $1,780.40.
"The U.S. long-dated yields backing off highs is offering some support. It also appears dip buyers from China have returned from Lunar New Year holidays," said OANDA senior market analyst Jeffrey Halley.
"In the bigger picture ... gold is merely pausing for breath, $1,760 remains a critical level, a break below that suggests deeper losses to the $1,600/$1,650 region."
Benchmark 10-year Treasury yields retreated from a near one-year peak hit on Wednesday. Lower yields reduce the opportunity cost of holding bullion, which pays no interest.
Federal Reserve officials were still prepared to keep monetary policy easy to help the coronavirus-hit economy, minutes of the Fed's January meeting showed.
Investor focus remained on the developments of a $1.9 trillion U.S. coronavirus stimulus.
U.S. retail sales rebounded in January, while U.S. producer prices increased by the most since 2009, suggesting inflation was starting to rise.
"Other asset classes as well as those within commodities are providing a more compelling investment payoff than gold presently," cautioned Michael Langford, director at corporate advisory AirGuide.
"We're seeing a re-allocation under renewed optimism, factory orders and general views of stronger underlying growth," Langford said, adding gold's typical attribute as an inflationary hedge was not enough to counter the strong demand for other assets.
Analysts also said the recent technical move of gold's 50-day moving average price dipping below the 200-day moving average, known as a death cross, could lead to more selling.
Silver eased 0.7% to $27.17 an ounce. Platinum gained 0.3% to $1,256.86 and palladium rose 0.1% to $2,372.59.