Gold Rises as Dollar and U.S. Yields Continue to Climb

By Gina Lee

Gold prices saw an increase on Tuesday morning in Asia, despite a gradual rise in the dollar and an uptick in U.S. Treasury yields. Gold gained 0.48%, reaching $1,882.65 as of 12:36 AM ET (4:36 AM GMT). The U.S. dollar, which typically moves inversely to gold, experienced a slight increase after falling from near its 20-year highs on Monday.

The dollar index, which had recently been on a downward trend, found support as investors reassessed the impact of potential U.S. interest rate hikes on its value. Meanwhile, benchmark Treasury yields continued to climb.

Stephen Innes, managing partner at SPI Asset Management, noted that with a clearer outlook on the gold markets, long-term investors might start positioning themselves for future declines in U.S. economic data.

Asian stock markets were primarily up on Tuesday, coinciding with the release of minutes from the latest policy meeting. Additionally, G-7 finance ministers and central bankers are set to convene soon.

Investors are also looking forward to speeches from Federal Reserve Chairman Jerome Powell and other Fed officials later in the day, with Philadelphia Fed President Patrick Harker speaking the following day.

In the realm of other precious metals, silver dipped by 0.2%, while platinum held steady at $945.76. Palladium fell by 1.2%. Innes pointed out that as China approaches a reopening and likely introduces more stimulus, it will positively impact all hard commodities. He emphasized that palladium, primarily used in industrial applications and particularly in the automotive sector, could benefit significantly from the reopening of ports in China.

Consultants Metals Focus indicated that improving demand coupled with lower supply may push both palladium and rhodium back into deficit by 2022, while also aiding in the reduction of platinum’s surplus.