Onome Amuge
Gold prices depreciated on Wednesday as its appeal was stifled by higher U.S. treasury yields and a 0.3 per cent increase in the dollar index while market participants keenly await the US consumer price data expected to be released later in the day.
It will be recalled that earlier this month, benchmark US 10-year treasury yields recorded a more than one-week peak, increasing the opportunity cost of holding gold and weighing heavily on non-yielding bullion’s appeal this year.
Spot gold slipped 0.6 per cent at $1,826.89 per ounce while US gold futures were down 0.5 per cent to $1,826.20.
Commenting on gold’s prospect, Margaret Yang, market strategist at DailyFX, a leading portal covering financial news and commodities reports, noted that if the inflation rate buoyed by the dollar’s rise gets higher than expected, it could encourage central banks to consider tightening their monetary policies faster than expected, making gold less appealing for other currency holders.
Some bullion experts and market watchers have however raised optimism that the current slide in gold prices is a positive news for buyers of the yellow metal.
Anuj Gupta, vice president, Commodities & Currency Trade, IIFL Securities, stated that the gold price outlook is a good opportunity for gold investors and buyers as overall sentiment for the metal considered a hedge against inflation remains bullish.
“One can continue the buy on dips strategy till gold price in the international market is above $1,800 per ounce levels,” he added.
