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Treasury yields see gold dip

The gold price has eased off any potential price gains as treasury yields firmed, but is floating above the eight-week low experienced last Wednesday, where spot prices hit $1,217.14, their weakest since May 10.

Ten-year US treasuries yields remain at high levels: “You have higher real yields in the United States, but a lower dollar, and these two are battling each other”, said ABN Amro analyst Georgette Boele in Reuters.

Spot gold at the time of writing sits at $1,221.26. Private sector payroll data released this week was more disappointing than expected, putting pressure on the inevitability of a Fed rate hike.

The data showed the service sector accelerated in June, but stronger demand was offset by slower employment gains, according to the Institute for Supply Management.

Minutes from the European Central Bank meeting post-forum have been released, which suggested they could scrap their bond-buying pledge. The result was a gain by the euro  against the dollar and a fall in stock prices.

Tim Clayton of Economic Calendar suggested that, while gold prices usually suffer in the short run when rates go up, they will be “punctuated by sharp rallies at times as the end of easy money triggers sharp sell-offs in equity markets”.

Last June Carsten Menke of Julius Baer commented on palladium, where he asserted a fundamentally bearish outlook owing to declining demand for diesel vehicles, which use palladium for autocatalysts.

In a note today, Menke reasserted his position: “Diesel car sales fell [in Europe’s five biggest markets] almost 8% year-on-year on an absolute basis while total sales rose 0.8%. Strength in Italy and Spain was offset by weakness in Germany and the UK. Due to the consumers’ concerns about the future of diesel cars, sales are unlikely to improve going forward, curbing platinum demand from auto catalysts and leaving the market in balance or slightly oversupplied.”

PhotoKurtis Garbutt, licensed under CC BY 2.0

Link to this article: : http://www.goldmadesimplenews.com/gold/treasury-yields-see-gold-dip-13262/

Posted by on Jul 7 2017. Filed under Gold News, Markets. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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