Gold rate inches lower as firm US Treasury yields weigh

Gold edged down on Wednesday, as firm U.S. Treasury yields continued to pressure the non-yielding bullion, although prices held above the 8-1/2-month trough hit in the previous session.

Spot gold eased 0.2% at $ 1,734.16 per ounce by 0052 GMT, having dropped to their lowest since June 15 at $ 1,706.70 on Tuesday. U.S. gold futures held steady at $ 1,734.10.

Benchmark U.S. Treasury yields dipped for a fourth straight day after jumping to a one-year high last week, but held near 1.4% levels, making non-interest paying gold unattractive to investors.

After a sharp sell-off last week, U.S. Treasuries have stabilized with bond market indicators and derivatives positioning pointing to near-term calm, but an improving economy could trigger another slide in their prices.

U.S. Federal Reserve officials, facing a potential bout of inflation this spring in an economy turbocharged by vaccines and government spending, on Tuesday said they will nevertheless keep their easy money plans in place in hopes of speeding displaced Americans back to work.

Investors now await developments in a $ 1.9 trillion U.S. stimulus bill passed by the House of Representatives last week, as the Senate begins debate over the legislation this week.

Silver dipped 0.3% to $ 26.67 an ounce, while palladium climbed 0.6% at $ 2,376.50. Platinum shed 0.3% to $ 1,200.50.

0700 UK Reserve Assets Total Feb
0850 France Markit Serv, Comp PMIs Feb
0855 Germany Markit Serv PMI Feb
0855 Germany Markit Comp Final PMI Feb
0900 EU Markit Serv, Comp Final PMIs Feb
1445 US Markit Serv, Comp Final PMIs Feb
1500 US ISM N-Mfg PMI Feb
1900 US Federal Reserve issues the Beige Book of economic condition