Gold falls as dollar strengthens, traders focus on bond auctions

Photographer: Andrey Rudakov / Bloomberg

Gold fell as the dollar remained resilient and 10-year Treasuries yields held near the highest level in over a year, weighing on the non-interest-bearing precious metal.

Investors will turn their attention to a hefty list of bonds auctions have focused on maturities that have been squeezed amid improving prospects for growth and inflation. Federal Reserve Chairman Jerome Powell reiterated in a Wall Street Journal editorial that the central bank will continue to provide aid to the economy “for as long as it takes” as the recovery is far from over. Richmond Fed Chairman Thomas Barkin said in an interview with Bloomberg on Sunday no sign of unwanted inflationary pressures yet.

Bullion has fallen nearly 9% this year as investors leave havens for riskier assets, although its inflation hedging role has helped prop up prices. The Fed said on Friday it would leave a major break for the big banks expires at the end of the month. This saw the dollar and bond yields climb, the latter remaining near its highest levels in about 14 months on Monday.

“The opportunity cost of being in a stimulus environment seems to be holding back gold,” said Chris Weston, head of research at Pepperstone Group Ltd. play better. “

Spot gold fell 0.7% to $ 1,732.47 an ounce at 6:46 am in London, after rising 0.5% on Friday. Silver fell 2.3%, while platinum and palladium also fell. The Bloomberg Dollar Spot Index advanced a third day.

Meanwhile, Powell and Treasury Secretary Janet Yellen are expected to make their first joint appearance before the U.S. House Financial Services Committee to testify on the Fed and Treasury pandemic policies on Tuesday.

– With the help of Swansy Afonso