Gold steady as economic worries counter stronger Treasury yields

Filed on August 28, 2020
Gold prices, dubai gold

(Photo: Ryan Lim/KT)

Gold has fallen more than 0.5 per cent so far this week.

Gold steadied on Friday as worries over an economic slump caused by the Covid-19 pandemic countered pressure from a jump in US Treasury yields on Federal Reserve Chair Jerome Powell's offer for more inflation tolerance.

Spot gold was up 0.1 per cent at $1,929.94 per ounce by 0117 GMT, after falling more than 1.2 per cent on Thursday. Gold has fallen more than 0.5 per cent so far this week.

US gold futures rose 0.2 per cent to $1,936.30.

The precious metal is priced at Dh235 for 24K, 220.75 for 22K and Dh180.50 for 18K, per gram in Dubai.

The Fed's new monetary policy strategy pledges to address "shortfalls" from the "broad-based and inclusive goal" of full employment and also promises to aim for 2 per cent inflation on average
Longer-term US Treasury yields climbed to their highest levels in months on Thursday. Higher bond yields increase the opportunity cost of holding non-interest bearing gold.

Meanwhile, the dollar index rose 0.1 per cent against a basket of major currencies.

Asian equities are likely to have a bumpy ride on Friday after US stocks scaled new peaks for a third straight session.

More than 24.33 million people have been reported to be infected by the novel coronavirus globally and 826,948? have died, according to a Reuters tally.

The number of Americans filing new claims for unemployment benefits hovered around 1 million last week, suggesting the labour market recovery was stalling as the Covid-19 pandemic drags.

US House of Representatives Speaker Nancy Pelosi said after talks with White House Chief of Staff Mark Meadows on Thursday that Democrats and Republicans remained far apart over how much to spend on the next coronavirus relief legislation.

Silver eased 0.1 per cent to $27.01 per ounce, platinum fell 0.7 per cent to $922.07, while palladium gained 0.8 per cent to $2,178.48.

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