Gold prices steady after hitting 2-week high on dollar retreat

Tuesday,   24-May-2022   08:01 AM (IST)

Gold steadied on Tuesday as the U.S. dollar stabilized after a slide in the previous session that drove greenback-priced bullion to its highest level in two weeks. Spot gold held its ground at $1,852.84 per ounce, as of 0048 GMT, after scaling to its highest since May 9 at $1,865.29 on Monday. U.S. gold futures gained 0.3% to $1,852.40. The dollar steadied after dropping to a one-month low in the previous session. A weaker dollar makes bullion more attractive for overseas buyers. Benchmark U.S. 10-year Treasury yields eased, buoying demand for zero-yield gold. Kansas City Federal Reserve Bank President Esther George said on Monday she expects the U.S. central bank to lift its target interest rate to about 2% by August, with further action dependent on how both supply and demand are affecting inflation. Bullion, seen as a safe store of value during times of economic crises, tends to become less attractive to investors when U.S. interest rates are raised because it yields nothing. Asian shares got off to a sluggish start on Tuesday after a rally on Wall Street was soured by an early slide in U.S. stock futures, while the euro was near one-month highs as odds narrowed on a July rate rise by the ECB. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.44% to 1,068.07 tonnes on Monday from 1,063.43 tonnes on Friday. Spot silver dipped 0.2% at $21.72 per ounce, and platinum eased 0.3% to $956.10, while palladium edged up 0.2% to $1,996.20. Russia’s Nornickel on Monday cut its estimate for the global palladium market deficit in 2022 to 100,000 troy ounces due to lower demand from the car industry amid the Ukraine crisis and a slow recovery of the chip market from shortage.