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PRECIOUS-Gold under pressure as U.S. Treasury yields rise, dollar firms

Published 17/02/2021, 03:27 pm
© Reuters.
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* Benchmark U.S. yields at highest since February 2020

* Dollar rebounds from three-week low

* Minutes of U.S. Fed Jan. meeting due at 1900 GMT

* Gold, Silver ETFs see biggest outflows in three months (Adds context, updates prices)

By Asha Sistla

Feb 17 (Reuters) - Gold prices extended losses for a fifth straight session on Wednesday, slipping to near two-week lows as soaring U.S. Treasury yields and a firmer dollar dented bullion's appeal.

Spot gold XAU= fell 0.5% to $1,786.11 per ounce by 0813 GMT. U.S. gold futures GCv1 fell 0.6% to $1,787.70.

"Investors are eyeing rising yields, dollar and are hesitant to do any bargain hunting on the precious metals at the moment as yields may go further up in view of reflation hopes and impending stimulus package," said DailyFX strategist Margaret Yang. "In the near-term gold price maybe under further pressure."

Benchmark U.S. Treasury yields jumped to their highest since late-February 2020, while the dollar index .DXY rebounded from a three-week low. US/ USD/

U.S. President Joe Biden wants Congress to pass his relief bill in the coming weeks in order to get $1,400 stimulus checks out to Americans and bolster unemployment payments. inflation boosts gold but also lifts Treasury yields, which in turn increases the opportunity cost of holding bullion.

"Deep corrections of (gold) prices due to short-term fluctuations are viewed as buying opportunities," Avtar Sandu, senior commodities manager at Phillip Futures, said in a note.

Investors are also looking forward to the minutes of the Federal Reserve's end-January monetary policy meeting due on Wednesday.

"A more dovish tone (from the Fed) is going to provide gold some support or else, a neutral statement like before is going to have very little impact," said DailyFX strategist Margaret Yang.

Gold and silver ETFs witnessed the biggest outflows in three months in the week ended Feb. 10 as investors put their money into soaring equities and high-yielding bond markets. GOL/ETF

Platinum XPT= , used in catalytic converters for vehicles, slipped 1.5% to $1,243.16, trading below Tuesday's high of $1,336.50, a peak since September 2014.

Palladium XPD= was down 0.2% to $2,377.69, while silver XAG= was down 0.4% to $27.11.

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