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PRECIOUS-Gold prices off 9-month low, but pressured by rising bond yields

Published 04/03/2021, 02:24 pm
Updated 04/03/2021, 06:54 pm
© Reuters.
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* Gold undeniably on a bearish trend - analyst

* Powell's comments at virtual Jobs Summit eyed

* Holdings of SPDR Gold fall to lowest since May (Adds analyst comments, updates prices)

By Sumita Layek

March 4 (Reuters) - Gold prices rose on Thursday, rebounding from a near nine-month low hit in the previous session, but rising U.S. Treasury yields continued to weigh on non-yielding bullion.

Spot gold XAU= rose 0.5% to $1,719.21 per ounce by 0729 GMT, having dropped to its lowest since June 9 at $1,701.40 on Wednesday. U.S. gold futures GCv1 was up 0.1% to $1,717.50.

"It's just a technical bounce. The broad fundamentals are still on the downside for gold - the dollar reversing, U.S. yields rising have been negative for gold prices," said Hareesh V, head of commodity research at Geojit Financial Services. He said gold's safe-haven appeal had reduced.

Higher U.S. Treasury yields US10YT=RR threatened gold's appeal as an inflation hedge as they increase the opportunity cost of holding bullion, which pays no returns, while the dollar rose against rivals. US/ USD/

Investors await Federal Reserve Chairman Jerome Powell's remarks before a virtual Wall Street Journal Jobs Summit at 1705 GMT, on the rapid rise in yields and clues on policy outlook. market will need more than "jawboning" if the Fed is serious about keeping interest rates low, "but in the absence of that, it would continue on its own path, which is higher yields and steepening of the yield curve," said Howie Lee, an economist at OCBC Bank.

The U.S. Senate delayed a debate on a $1.9 trillion COVID-19 relief bill until at least Thursday. from inflows in gold exchange traded funds that were a major driver for prices in 2020 also appear to be waning, said Michael Langford, director at corporate advisory AirGuide.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD , fell to their lowest since May 2020 on Wednesday. GOL/ETF

Silver XAG= rose 0.4% to $26.17 an ounce, while palladium XPD= was up 0.3% to $2,361.08. Platinum XPT= was up 0.2% to $1,169.68.

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