April 22, 2021
Gold nears $1,800 level as U.S. dollar, yields retreat
(Reuters) - Gold prices rose to a two-month high on Thursday, approaching the key $1,800 threshold as the U.S. dollar faltered with easing Treasury yields, while supply concerns kept palladium anchored near last session's record peak.
Spot gold was steady at $1,793.32 per ounce, after hitting its highest since Feb. 25 at $1,797.67. U.S. gold futures were flat at $1,793.70 per ounce.
"What's obviously underpinning the upswing (in gold) is that dynamic in U.S. Treasuries... which is sort of pushing lower in the very short term," said IG Market analyst Kyle Rodda, adding that a drop below 1.5% in yields could help push gold above $1,800 levels.
An improvement in market sentiment overnight and its knock-on effects on the dollar helped gold jump back again and test the top of its recent ranges, Rodda said.
Benchmark 10-year U.S. Treasury yield was pinned below 1.6%, reducing the opportunity cost of holding non-yielding bullion. The dollar index held near multi-week lows against most major currencies.
Market participants now await a European Central Bank meeting due later in the day and a U.S. Federal Reserve policy meeting next week.
Palladium gained 0.1% to $2,877.12 an ounce, having surged to an all-time high of $2,891.20 per ounce on Wednesday.
"Long running tightness in the market is fuelling the metal's rise as auto demand remains strong. Although Nornickel is bringing back to production two downed PGM (Platinum Group Metals) mines, the market remains cautious of oversupply," HSBC analysts wrote in a note.
The auto-catalyst metal has surged nearly 25% since Russia's Nornickel, the world's largest producer of the metal, partly suspended operations at two of its mines in late February.
Among other precious metals, silver eased 0.5% to $26.45 per ounce and platinum slipped 0.2% to $1,211.32.