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Gold Rises to Highest in More Than a Week as Dollar Slips
(Bloomberg) — Gold advanced to the highest in more than a week as gains in bond yields and the dollar abated.Sliding Treasury yields increase the allure of bullion, which doesn’t earn interest, while a weaker dollar makes gold more appealing to investors holding other currencies. The ebb for yields and the greenback is taking place even as positive economic data shows rapid growth for U.S. businesses and jobs.That’s “good news for gold,” according to Commerzbank AG analyst Carsten Fritsch.Gold has been under pressure this year because of increasing optimism over the post-pandemic economic recovery in the U.S., which buoyed bond yields and the dollar. Investors fled bullion-backed exchange-traded funds, a major pillar in gold’s ascent to an all-time high last year, with holdings in ETFs dropping to the lowest since May.Now, bullion could have new tailwinds ahead. If concerns emerge that the U.S. economy might overheat as a result of massive fiscal stimulus, “gold would be the big winner,” Fritsch said. Gold is in a “bottoming-out phase” with support at a low of $1,680 an ounce and an upper bound of $1,760, he said.Spot gold rose 0.8% to $1,742.82 by 1:52 p.m. in New York, after touching the highest since March 25. Futures for June delivery on the Comex added 0.8% to settle at $1,743. Spot silver, palladium and platinum also advanced. The Bloomberg Dollar Spot Index fell, paring an earlier gain.Gold could extend gains if it breaks above $1,750, said Stephen Innes, chief global markets strategist at Axi. Traders were also assessing comments by Treasury Secretary Janet Yellen, who reiterated her view that the $1.9 trillion U.S. pandemic-relief bill signed last month won’t stoke inflation, and suggested that low interest rates will continue to prevail in coming years.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.