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PRECIOUS-Gold gains as subdued U.S. dollar, bond yields lift appeal

Published 06/05/2021, 01:48 pm
Updated 06/05/2021, 05:18 pm
© Reuters.
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* Dollar eases off two-week peak

* Palladium holds near record high

* Spot gold to retest resistance at $1,802/oz - technicals (Recasts, adds chart, updates prices)

By Shreyansi Singh

May 6 (Reuters) - Gold prices rose on Thursday as a pullback in the U.S. dollar and Treasury yields lifted demand for the safe-haven metal, while investors awaited U.S. non-farm payrolls data for April due later this week.

Spot gold XAU= was up 0.4% at $1,794.30 per ounce by 0650 GMT. U.S. gold futures GCv1 rose 0.6% to $1,794.20 per ounce.

"The U.S. Federal Reserve is continuing to push back here, it is good for gold because it's keeping yields lower. I think this will eventually lead to a weaker U.S. dollar," said Stephen Innes, managing partner at SPI Asset Management.

"A test of $1,800 is expected sooner rather than later the way this market is marching on to the beat of a very dovish Fed."

Benchmark U.S. 10-year Treasury yields US10YT=RR slipped below 1.6% and hovered close to a one-week low hit on Tuesday, reducing the opportunity cost of holding non-interest bearing gold. US/

The dollar index .DXY dipped 0.1%, moving further away from a near two-week high hit on Wednesday. USD/

Focus now shifts to Friday's U.S. monthly jobs report, which is expected to show non-farm-payrolls increased by 978,000 last month. U.S. economy may be growing more quickly and unemployment falling faster than the core of Fed policymakers projected in March, Fed Governor Michelle Bowman said on Wednesday. Chicago Fed President Charles Evans reiterated his worries about reaching the 2% inflation goal and said he expected monetary policy to stay accommodative for some time. interest rates decrease the opportunity cost of holding non-yielding bullion.

Spot gold is expected to retest resistance at $1,802 per ounce, with a good chance of breaking above this level and rising to $1,816, according to Reuters technical analyst Wang Tao. TECH/C

Palladium XPD= rose 0.4% to $2,984.97 per ounce, after scaling an all-time high of $3,017.18 on Tuesday on supply shortfalls.

Silver XAG= was up 1% at $26.77 per ounce, while platinum XPT= dipped 0.5% to $1,230.66.

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