Gold prices inch lower as firmer bond yields, recovery hopes weigh

Gold slipped on Tuesday as firmer U.S. Treasury yields took some sheen off the yellow metal, with optimism about a quick economic rebound weighing on prices further.

FUNDAMENTALS
Spot gold fell 0.3% to $ 1,728.15 per ounce at 0122 GMT. U.S. gold futures were down 0.2% at $ 1,729.10 per ounce.

Treasury yields in the United States have stayed marginally higher after a successful three-year note auction and ahead of important data releases this week, including consumer price inflation on Tuesday.

Treasury sales of $ 271 billion in new debt and a key inflation report this week could put an end to the bond market’s recent lull, reinvigorating a surge in yields.

Higher bond yields increase the opportunity cost of holding bullion, which pays no return.

A survey published on Monday by the Federal Reserve Bank of New York showed U.S. consumers raised their inflation rates again in March following gradual increases in recent months, and they became more positive about the job market.

The United States’ economy may see a substantial turnaround this year as a result of accommodative monetary and fiscal policy, but the job market still has a lot of space for growth, Boston Federal Reserve Bank President Eric Rosengren said.

Asian stocks traded cautiously, taking a lead from the U.S. markets, as investors waited for cues from the upcoming corporate earnings season and a key inflation report later this week.

Silver fell 0.6% to $ 24.69 and palladium inched down 0.1% to $ 2,672.30. Platinum slipped 0.6% to $ 1,163.57.

DATA/EVENTS (GMT)
0600 UK GDP Est 3M/3/M Feb
0600 UK GDP Estimate MM, YY Feb
0830 UK Manufacturing Output MM Feb
0900 Germany ZEW Economic Sentiment April
0900 Germany ZEW Current Conditions April
1230 US CPI MM, SA March N/A China Exports, Imports YY March N/A China Trade Balance March