Gold Is On A Three-Month High Amidst Virus Worries

Gold prices rose on May 17 to their highest level in more than three months, as a dip in U.S. Treasury yields and worries over surging COVID-19 cases in some Asian countries boosted demand for the safe-haven metal

Post By : IJ News Service On 17 May 2021 3:18 PM

Spot gold was up 0.6% at $1,852.39 per ounce by 0318 GMT, after hitting its highest since Feb. 10 earlier in the session. U.S. gold futures jumped 0.7% to $1,851.10. According to DailyFX -- Treasury yields are falling and on the other hand, there seems to be fears about virus resurgence in Singapore, Taiwan and broader Asian-Pacific markets... driving up demand for safety.

Benchmark U.S. 10-year Treasury yields slipped to their lowest in nearly a week, reducing the opportunity cost of holding non-interest bearing gold.

In India, the world's second-worst pandemic-hit country after the United States, the tally of coronavirus infections reached nearly 24.7 million on Sunday.

Investors now await minutes of the U.S. Federal Reserve's last meeting due on Wednesday for more cues on the central bank's monetary policy and any comments on rising inflation. Inflation is going to be a strong driver behind gold in the short- and medium-term. There are always concerns about Fed tapering, but the latest non-farm payroll report is helping to contain that fear.

The Fed has pledged to keep interest rates low until the economy reaches full employment, and inflation hits 2% and is on track to "moderately" exceed that level for some time. Elsewhere, silver was up 0.9% at $27.66 per ounce, after hitting a one-week high earlier in the day. Platinum gained 0.3% to $1,228.50 and palladium edged 0.1% higher to $2,895.30.
 

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