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PRECIOUS-Gold holds near multi-month lows as U.S. yields advance

Published 19/02/2021, 03:05 am
© Reuters.
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* Investors favour other assets to hedge inflation - analyst

* U.S. Fed officials prepared to keep monetary policy easy

* Interactive graphic tracking global spread of coronavirus: https://tmsnrt.rs/3mvcUoa (Updates prices)

By K. Sathya Narayanan

Feb 18 (Reuters) - Gold lingered near 11-week lows in choppy trading on Thursday as investor optimism for a global economic recovery raised U.S. Treasury yields and made the precious metal less attractive.

Spot gold XAU= inched 0.1% lower to $1,774.21 per ounce at 1:45 p.m. EST (1845 GMT), near its lowest since Nov. 30 at $1,767.20, hit earlier.

U.S. gold futures GCv1 settled up 0.1% at $1,775.

Recent U.S. data, including manufacturing numbers from the New York Federal Reserve and separate economic readings from the Philadelphia Fed, were very strong and showed "things are starting to come back from the coronavirus slump," said Bob Haberkorn, senior market strategist at RJO Futures. some bargain hunting, given gold's dip below $1,800 and the lower dollar, did prompt an initial bounce in gold from recent lows, Haberkorn said. USD/

Also providing a floor to bullion, the U.S. Federal Reserve on Wednesday reiterated its pledge to keep interest rates near zero until inflation and employment pick up. reaction to an unexpected increase in weekly jobless claims on Thursday was also relatively muted, with U.S. Treasury yields rising amid signs of an economic upswing. US/

Higher yields have eroded gold's appeal as an inflation hedge of late, since they increase the opportunity cost of holding the non-yielding bullion.

Gold is having a tough time trying to win over investors as an inflation hedge, with other assets favoured instead, said FXTM market analyst Han Tan.

On the technical front, a dip in gold's 50-day moving average below the 200-day moving average could lead to more selling, analysts said.

Auto-catalyst metal platinum XPT= gained 1.1% to $1,266.71 per ounce.

"As long as data such as auto sales and production continues to be positive, that will help the message that platinum should be one of the winners from the industrial cycle strengthening," said independent analyst Robin Bhar.

Elsewhere, palladium XPD= fell 0.7% to $2,355.55 and silver XAG= lost 1.2% to $27.01.

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