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PRECIOUS-Gold gains as rising virus cases, pullback in U.S. yields lift demand

Published 03/05/2021, 02:49 pm
Updated 03/05/2021, 05:54 pm
© Reuters.
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* Investors await raft of U.S. economic data this week

* Palladium hit record high on Friday over supply concerns

* Dollar eases off near two-week peak (Updates prices)

By Shreyansi Singh

May 3 (Reuters) - Gold prices rose on Monday as a retreat in U.S. Treasury yields and worries over surging COVID-19 cases in some countries boosted the metal's appeal, while palladium held firm after surpassing the $3,000-per-ounce level in the previous session.

Spot gold XAU= was up 0.5% at $1,777.67 per ounce by 0737 GMT. Trading in Asian hours was low due to public holidays in China and Japan. U.S. gold futures GCv1 rose 0.6% to $1,777.60 per ounce.

"The pandemic situation in Japan and India remains a key concern among market participants, so that's driving up the demand for safe-haven assets, including gold," said Margaret Yang, a strategist at DailyFX, adding that retreating U.S. Treasury yields lent further support.

Benchmark U.S. 10-year Treasury yields US10YT=RR retreated after hitting their highest in nearly two weeks last week. Lower bond yields reduce the opportunity cost of holding non-interest bearing gold.

India on Monday reported more than 300,000 new coronavirus cases for a twelfth straight day, taking its overall caseload to just shy of 20 million. dollar index .DXY slipped 0.1%, after hitting a near two-week high earlier in the session, raising gold's appeal for other currency holders. USD/

Investors now look forward to a raft of U.S. economic data this week, including the ISM manufacturing survey and April payroll numbers, for further clues about recovery in the world's largest economy.

On the technical front, "gold has resistance at $1,790 an ounce, followed by a double top and the 100-day moving average in the $1,800 an ounce area. Support is nearby between $1,755 and $1,760 an ounce," OANDA senior market analyst Jeffrey Halley said in a note.

Elsewhere, auto-catalyst metal palladium XPD= rose 0.7% to $2,957.50 per ounce, after hitting an all-time high of $3,007.73 per ounce on Friday over supply concerns.

Silver XAG= was up 0.7% at $26.08 per ounce. Platinum XPT= rose 0.4% to $1,202.72.

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