US bond yields, gold fall to 2-week low as dollar strengthens

Gold prices hit near two-week lows on Wednesday, as rising Treasury yields and a stronger US dollar continued to dampen demand for greenback-priced bullion.

fundamentals

* Spot gold was down 0.2% at $1,834.09 an ounce as of 0044 GMT, its lowest level since May 20. US gold futures fell 0.6% to $1,838.20.

* The dollar index held steady after gains on Tuesday, making bullion more expensive for buyers holding other currencies. [USD/]

* The benchmark US 10-year Treasury yield rose, reducing the appeal of zero-yield gold. [US/]

* Gold prices fell nearly 1% in the previous session, and registered a second straight month of decline in May.

* US President Joe Biden met with Federal Reserve Chairman Jerome Powell on Tuesday to discuss the historic inflation that is ravaging US pockets, even as he assured the central bank chief that he would not get political interference. Will get rid of

* Bullion is considered a hedge against inflation, but the Fed raises short-term US interest rates to fight rising costs, increasing the opportunity cost of holding it, as gold itself pays no interest.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.1% to 1,068.36 tonnes on Tuesday, from 1,069.81 tonnes on Friday. [GOL/ETF]

* Spot silver fell 0.1% to $21.2 an ounce, and platinum fell 0.1% to $963.48, while palladium gained 0.1% to $2,000.79.

Data/Events (GMT)

0130 Australia Real GDP QQ, YY SA Q1

0145 China Caixin MFG PMI Final May

0600 UK Nationwide House Price MM, YY May

0750 France S&P Global MFG PMI

0755 Germany S&P Global/BME MFG PMI May

0800 EU S&P Global MFG Final PMI May

0830 UK S&P GLBL/CIPS MFG PMI FNL May

0900 EU unemployment rate April

1345 US S&P Global MFG PMI Final May

1400 US ISM Manufacturing PMI May

1800 US Federal Reserve released Beige Book of Economic Situation

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