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Gold Prices Steady as Dollar Rally Takes a Breather

Investing.com – Gold prices turned positive as both the dollar and U.S. bond yields fell from their highs, helping the yellow metal to recover some of its losses sustained in the session.

Gold futures for June delivery on the Comex division of the New York Mercantile Exchange rose by $2.10, or 0.17%, to $1,1292.60 a troy ounce.

Gold prices recovered losses after falling to a session low of $1,285.70 as the dollar retreated from a five-month high, while the 10-year treasury yield met resistance after hitting a nearly seven-year high.

Gold is sensitive to moves higher in both bond yields and the U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding gold as it pays no interest.

The move off the lows in the yellow metal was also supported by renewed geopolitical uncertainty after President Donald Trump appeared less certain as to whether a planned summit with North Korean leader Kim Jong Un would still take place.

Earlier in the week, North Korea cancelled a planned meeting with South Korea, claiming joint U.S.-South Korea military drills was a provocation and preparation for an invasion, media reports suggested.

Gold prices are likely to remained pressured by rising bond yields and a stronger dollar, analysts said, as the recent raft of positive U.S. data has renewed expectations the Federal Reserve may consider a faster pace of rate hikes.

Some analysts claimed ongoing dollar and bond yield strength could pressure gold prices to $1,250 by year end.

In other precious metal trade, silver futures rose 0.96% to $16.43 a troy ounce, while platinum futures fell 0.36% to $894.00 an ounce.

Copper rose 0.62% to $3.08.

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