Gold inches down as higher yields outperform stimulus optimism

(Reuters) – Gold prices fell lower on Thursday as the Treasury tighter support from a Democratic sweep in the Georgia Senate overdraft sparked hopes for further stimulus.

PHOTO FILE: Gold bullion is on display at Hatton Garden Metals Precious Metal Dealers in London, Britain July 21, 2015. REUTERS / Neil Hall / File Photo

Gold spot spot decreased 0.1% to $ 1,916.77 per ounce by 0250 GMT, after falling more than 1.5% in the previous session. U.S. gold futures climbed 0.5% to $ 1,918.40.

“The rise in 10-year bond yields after the Democratic victory in Georgia has pushed gold lower, as it is acutely aware of the yield path,” said Jeffrey Halley, senior market analyst. at OANDA.

Increasing the opportunity cost of keeping gold interest-free, U.S. Treasury yields remained flat 10-year after rising above 1% for the first time since March Wednesday.

However, bullion decline was limited by the fact that Democrats won two races in Georgia paved the way for greater fiscal stimulus under President Joe Biden.

Many investors see bullion as a hedge against inflation and feared currency damage that could come from massive stimulus measures.

Concerns arose shortly after supporters of President Donald Trump slammed the U.S. Capitol in an attempt to reverse its election loss.

“The dollar is going to decline overall through 2021, US output may move slightly higher from here, but they are not going to run away to the top, in that environment gold should grow, ”said Halley.

The Federal Reserve was almost unanimous in its decision last month to leave their bond purchase program unchanged, according to the minutes of the U.S. central bank’s December policy meeting.

Meanwhile, more Americans were admitted to hospital with COVID-19 on Wednesday than at any time since the outbreak began, as total coronavirus infections exceeded the 21 mark. one million.

Among other precious metals, a 1% silver shed to $ 27.03 an ounce. Platinum decreased 0.9% to $ 1,091.75, and palladium rose 0.1% to $ 2,441.18.

Reporting by Sumita Layek in Bengaluru; Edited by Ramakrishnan M. and Subhranshu Sahu

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