Gold flat as subdued bond yields counter faster Fed taper bets – Reuters

Register now for FREE unlimited access to reuters.com
  • Faster Fed tapering fears could push gold to $1,720/oz- analyst
  • U.S. employment growth slowed in November

Dec 6 (Reuters) – Gold prices were flat on Monday, as the metal was caught between subdued U.S. bond yields and the prospect of the Federal Reserve tightening policy at a faster pace which dimmed its appeal.

Spot gold was little changed at $1,782.95 per ounce by 0419 GMT. U.S. gold futures were flat at $1,783.60.

U.S. 10-year Treasury yields hovered near a more than two-month low hit on Friday. Thirty-year Treasury yields were also close to their lowest since the start of this year. Weaker yields decrease gold’s opportunity cost.

Register now for FREE unlimited access to reuters.com

Bullion rose 1% on Friday after data showed U.S. employment growth slowed considerably in November. read more

But the data did little to alter expectations of the Fed tapering its stimulus measures at a faster pace, as policymakers likely respond to signs of a tightening labour market with the unemployment rate plunging to a 21-month low. read more

The Fed’s two-day policy meet is set to begin on Dec. 14.

“A faster taper announcement looks like a certainty if data on the Omicron variant this week and next confirms it is milder in severity, so gold could come under sustained pressure and potentially trade as low as $1,720 next week,” said Jeffrey Halley, senior market analyst at Oanda.

Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of non-interest bearing gold.

Market participants now eye U.S. consumer price data on Friday.

“An annual print above 7.0% could see U.S. yields steepen once again, and gold will move lower,” Halley said, adding that any potentially rally in gold back above $1,800 will be fragile and lack momentum.

Spot silver fell 0.1% to $22.48 an ounce. Platinum rose 0.4% to $935.74, while palladium declined 0.1% to $1,807.83.

Register now for FREE unlimited access to reuters.com

Reporting by Nakul Iyer in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich

Our Standards: The Thomson Reuters Trust Principles.