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PRECIOUS-Gold eyes worst quarter in over 4 years on stronger dollar, yields

Published 31/03/2021, 08:46 pm
© Reuters.
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(Adds graphic, updates prices)

* U.S. Treasury yields on track for fourth straight monthly gain

* Dollar heads for best month since November 2016

* Gold set for a third consecutive monthly decline

* Palladium set for best monthly gain since February 2020

By Brijesh Patel

March 31 (Reuters) - Gold was on track for its biggest quarterly decline in more than four years on Wednesday, as elevated U.S. bond yields and a stronger dollar diminished the safe-haven bullion's appeal.

Spot gold XAU= was flat at $1,684.78 per ounce by 1212 GMT, having earlier touched its lowest since March 8 at $1,677.61. U.S. gold futures GCv1 were little changed at $1,686.40.

For the quarter, the metal is down more than 11% and is on track for its worst quarterly performance since end-December 2016. Gold is also headed for a third straight monthly decline.

"The extraordinary strength of the dollar and also U.S. Treasury yields is weighing massively on gold. In short, at the moment, it looks like gold is going to be under some pressure," said independent analyst Ross Norman.

"Gold seems to be ignoring a lot of good news stories like massive stimulus spend, at the moment. It's just simply working lockstep with those two other assets (dollar and yields)."

Some investors view gold as a hedge against higher inflation that could follow stimulus measures, but a recent spike in U.S. Treasury yields has weighed on the non-yielding commodity. US/

The U.S. dollar .DXY scaled a near five-month peak and is set for its best month since November 2016. USD/

Meanwhile, U.S. President Joe Biden is set to outline how he intends to pay for a $3 trillion-$4 trillion infrastructure plan, after saying 90% of adult Americans would be eligible for vaccination by April 19. and silver markets seem to be looking beyond a third wave to focus on the projected vaccination progress, especially in the United States," Julius Baer analyst Carsten Menke said. MKTS/GLOB

"We expect a further fading of safe-haven demand against this backdrop and do not treat this sell-off as an opportunity."

Silver XAG= rose 0.1% to $24.03, but was down over 9% for the month.

Platinum XPT= gained 1.6% to $1,172.59, while palladium XPD= climbed 1.5% to $2,628.68 and was heading for its best month since February 2020.

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