Gold prices sink as U.S. yields and dollar edge higher

Gold prices sink as U.S. yields and dollar edge higher

Gold futures on Thursday were trading lower as rising U.S. bond yields and a firmer dollar created some headwinds for bullion buying.

“Gold is lower as the metal remains trapped in a trading range without breaking out in either direction for now,” wrote Peter Cardillo, chief market strategist at Spartan Capital Securities.  

The longer-term outlook for the yellow metal among some dealers is for higher prices, amid expectations for further government relief to boost virus-stricken economies grow.

President-elect Joe Biden later Thursday is expected to outline a $2 trillion fiscal spending package that would include more direct payments to American families and significant state and local funding.

Gold prices on a longer-term could rise against that backdrop bullish investors say.

However, buoyant U.S. Treasury yields, which compete against gold for haven demand, and a perkier dollar, measured by the ICE U.S. Dollar Index

have weighed on gold prices, experts speculate.

The 10-year Treasury yield was around 1.10% on Thursday and had approached 1.19% earlier in the week. Gold and other precious metals don’t offer a coupon.

Separately, the dollar was up 0.1% at around 90.47. A stronger buck can make assets priced in the currency more expensive to traders overseas.

Against the backdrop, February gold prices


 traded $12, or 0.6%, lower at $1,843.10 an ounce, after a 0.6% rise on Wednesday.

Silver for March delivery

 meanwhile, was trading 19 cents, or 0.7%, lower at $25.41 an ounce.

Meanwhile, U.S. weekly initial jobless claims rose leapt by 181,000 to a seasonally adjusted 965,000 in the seven days ended Jan. 9, the government said Thursday.

The rise in the reading for unemployment insurance to the highest level since August may support arguments for additional stimulus, which could influence gold trade.

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