Gold recovers from 9-month low, but higher yields weigh

Gold prices edged up on Thursday to recover from a near nine-month low hit in the previous session, although higher U.S. Treasury yields continued to weigh on the non-yielding bullion’s appeal.

FUNDAMENTALS

Spot gold was up 0.2% at $1,714.27 per ounce by 0051 GMT, having dropped to its lowest since June 9 at $1,701.40 on Wednesday. U.S. gold futures dipped 0.2% to $1,712.80.

Benchmark U.S. Treasury yields held near 1.5%, increasing the opportunity cost of holding bullion, which pays no returns.

The U.S. economic recovery continued at a modest pace over the first weeks of this year, the Federal Reserve reported on Wednesday.

Chicago Fed President Charles Evans on Wednesday said he sees the recent rapid rise in bond yields as mostly reflecting improvements in the economy.

U.S. private payrolls increased less than expected in February, suggesting the labor market was continuing to struggle.

The U.S. Senate delayed the start of debate on a $1.9 trillion COVID-19 relief bill until at least Thursday.

Investors now await Fed Chair Jerome Powell’s speech before a virtual Wall Street Journal Jobs Summit at 1705 GMT, for clues on the outlook of the central bank’s monetary policy.

Perth Mint’s gold sales surged in February to their highest in at least nine years, while silver sales also jumped, the refiner said in a blog post on Wednesday.

Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust fell 0.4% to 1,082.38 tonnes on Wednesday.

Silver rose 0.4% to $26.18 an ounce, while palladium eased 0.3% at $2,347.52. Platinum shed 0.5% to $1,161.50.

DATA/EVENTS (GMT)

1000 EU Unemployment Rate Jan

1330 US Initial Jobless Clm Weekly

1500 US Factory Orders MM Jan

1705 US Fed Chair Jerome Powell participates in conversation on the U.S. economy before virtual Wall Street Journal Jobs Summit