Gold prices, on Thursday, June 22, rose for the second consecutive day as oil price slump boosts safe haven demand
The precious metal appreciated as risk averse sentiment amid weaker oil prices drove up the demand for the metal, with a softer dollar and weakness in U.S. Treasury yields also lending support.
Spot gold rose 0.5 percent to $1,252.41 per ounce at 0812 GMT. It rose 0.3 percent in the previous session, its largest intraday percentage change since June 6. U.S. gold futures for August delivery rose 0.6 percent to $1,253.30 per ounce.
“A softer U.S. dollar and a risk-off bias following the recent declines to crude saw gold turn higher during Asian hours on Thursday,” MKS PAMP trader Sam Laughlin said in a note.
Oil turned lower on Thursday after posting gains earlier I the session as traders look ready to test new lows for crude prices with worries persisting over a global glut.
“The uncontrolled oil price spill in the futures markets may have seen some traders pushing the risk aversion button and buying gold,” said Jeffrey Halley, senior market analyst at
“The primary driver appears to be the flattening of the longer-dated U.S. Treasury curve.”The U.S. Treasury yield curve flattened to almost 10-year lows on Wednesday as investors evaluated the impact of hawkish
Federal Reserve policy on the economy even as inflation measures are deteriorating. U.S. home resales unexpectedly rose in May to the third highest monthly level in a decade and a chronic inventory shortage pushed the median home price to an all-time high.
Gold is highly sensitive to rising rates and yields, which increase the opportunity cost of holding non-yielding assets such as bullion while boosting the dollar, in which it is priced.
Spot gold may bounce more into a range of $1,257 to $1,261 per ounce, as it has cleared a resistance at $1,251, according to Reuters technical analyst Wang Tao.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.04 percent to 853.98 tonnes on Wednesday.
Among other precious metals, silver gained 1 percent to $16.61 per ounce. Platinum touched its highest in a week during the session and was up 0.6 percent to $929.20 per ounce, while palladium slipped 0.8 percent to $880.99 per ounce.
