Gold rose as US bond yields fell following dovish commentary from a key European Central Bank official.
(Bloomberg) — Gold rose as US bond yields fell following dovish commentary from a key European Central Bank official.
ECB Governing Council member and known hawk Klaas Knot said monetary tightening beyond next week’s meeting is anything but guaranteed. Global bond yields, including US Treasuries fell following the comments, boosting non-interest bearing gold.
Bullion is consolidating around $1,950 an ounce as investors wait for a clearer outlook on the Federal Reserve’s monetary policy path. While swaps traders see a hike at its next meeting as virtually guaranteed, consensus becomes more divided from there.
Data Tuesday showed US retail sales rising less than expected, a potentially welcome sign for the Fed as it seeks to cool inflation. Still, figures excluding automobile and gas purchases were in line with forecasts, pointing to relatively robust consumption.
Inflows into bullion-backed exchange-traded funds on Monday showed holdings ticking higher for a second day following a 19-day run of declines, according to initial data compiled by Bloomberg. Meanwhile, money managers are finding more appeal in gold, having increased net-long positions to a five-week high.
Spot gold rose 0.3% to $1,961.95 an ounce at 1:45 p.m. in London, after gaining almost 2% over the previous two weeks. The Bloomberg Dollar Spot Index was flat. Silver and platinum steadied, while palladium climbed.
–With assistance from Sybilla Gross.
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