PRECIOUS-Gold jumps 2% as U.S. dollar, bond yields retreat

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* Dollar lowers to more than a year high

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* Banks prepare to liquidate LME gold and silver contracts

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* Fed plans to ease bond-buying program (Fed adds minutes, updates prices)

October 13 (Businesshala) – A pullback in the dollar and US Treasury yields boosted demand for the safe-haven metal, with gold prices rising 2% to a one-month peak on Wednesday.

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Spot gold was up 1.8% to $1,791.41 an ounce as of 2:13 a.m. ET (1813 GMT).

US gold futures closed 2% higher at $1,794.70.

Other precious metals also rose, with spot silver up 2.5% to $23.09 an ounce, platinum up 1.2% to $1,019.54 and palladium up 3.5% to $2,116.68.

“Gold is currently following the yield. The initial reaction was a major uptick in yields after the CPI (Consumer Price Index) data is now starting to fade,” said Daniel Pavillonis, senior market strategist at RJO Futures.

Gold opened gains as benchmark US 10-year Treasury yields jumped more than 1.6% after a solid rise in US consumer prices in September and data leading to further increases in the coming months.

But a subsequent fall in yields, which lowered the opportunity cost of holding interest-free gold, fueled a strong rally in the precious metals.

The metal was also supported by a fall in the dollar and concerns that higher inflation would affect global economic growth.

Edward Moya, senior market analyst at the brokerage, said, “Inflation expectations mixed with global growth concerns have left many investors worried that business and consumers will be very weak in the second half of 2022. Safe-haven flows in the way of gold. are coming.” OANDA said in a note.

US central bankers indicated they could begin to ease their crisis-era support for the economy in mid-November, though they are divided on how high inflation is a threat and how quickly they should react to interest rates. may need to be extended, their minutes showed the policy meeting on September 21-22.

Meanwhile, a group of banks, which partnered with the London Metal Exchange to launch gold and silver futures in 2017, are preparing to abandon the project after volumes were not as expected.

Reporting by Brijesh Patel in Bengaluru; Editing by Vinay Dwivedi and Maju Samuel


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