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    Gold recovers after worst sell-off in six weeks

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    Naija247news Editorial Teamhttps://www.naija247news.com/
    Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

    U.S. 10-year yield hits six-week high on Monday

    Spot gold may stabilise around support at $1,801/oz – technicals

    Jan 4 – Gold inched up on Tuesday, after a spike in U.S. bond yields spurred by bets of earlier-than-expected interest rate hikes by the Federal Reserve led to bullion’s worst sell-off in six weeks in the previous session.

    Spot gold was up 0.2% at $1,804.04 per ounce by 0628 GMT, after prices hit a more than one-month high of $1,831.62 on Monday, before reversing course to close 1.5% lower. U.S. gold futures were up 0.3% at $1,804.70.

    “When you have this kind of a rise in yields that undermines the appeal of an anti-inflation hedge … (it’s) really not surprising to see gold start weaker,” DailyFX currency strategist Ilya Spivak said.

    Towards 2021-end, interest rate expectations were rising, but inflation worries were building up even faster, so real interest rates were kept anchored and that gave gold some appeal as a store of inflation-adjusted value, Spivak added.

    Benchmark 10-year Treasury yields rose to a six-week high on Monday, with investors expecting the Fed to raise rates in March, soon after it completes tapering of its bond purchases.

    Higher yields raise the opportunity cost of holding non-interest paying gold.

    The Omicron coronavirus variant appears to be far more contagious than previous iterations, but data suggests it may be less virulent than Delta, which led to various nations taking strict preventive measures. read more

    A number of businesses, including several major U.S. banks, have encouraged staff to work from home during the first few weeks of the year, while the U.S. Food and Drug Administration on Monday authorised the use of a third dose of the Pfizer/BioNTech COVID-19 vaccine for children aged 12 to 15. read more

    Spot gold may stabilise around a support at $1,801 per ounce and test a resistance at $1,815, according to Reuters technical analyst Wang Tao.

    Spot silver fell 0.5% to $22.74 an ounce, platinum shed 0.3% to $952.28 and palladium gained 0.8% to $1,839.86.

    Reporting by Asha Sistla in Bengaluru; Editing by Rashmi Aich and Shounak Dasgupta

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