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PRECIOUS-Gold retreats on firm dollar, yields; U.S. inflation data eyed

Published 13/04/2021, 02:30 pm
© Reuters.
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* U.S. inflation data for March due later in day

* U.S. consumers raise inflation outlook - NY Fed survey (Recasts, adds comments; updates prices)

By Diptendu Lahiri

April 13 (Reuters) - Gold prices fell on Tuesday as a stronger dollar and rising Treasury yields dented demand for the safe-haven metal ahead U.S. inflation data later in the day.

Spot gold XAU= fell 0.4% to $1,725.15 per ounce by 0633 GMT. U.S. gold futures GCv1 were also down 0.4% at $1,726.20 per ounce.

"At the moment, a stronger dollar and higher yields on Treasuries are exerting pressure on gold," said Amit Sajeja, a vice president at Motilal Oswal.

A stronger dollar pressures gold as the metal becomes expensive for buyers outside the United States, while higher returns on bonds increases the opportunity cost for holding non-yielding bullion. US/ USD/

A survey released on Monday by the Federal Reserve Bank of New York showed U.S. consumers raised their inflation expectations again in March after gradual increases in recent months, and became more positive about the job market, boosting the yields and the dollar. hard to imagine that gold will not gain today if the data shows higher inflation, but there is a big chance of it pulling back later this week if retail sales data comes positive on Thursday," said Stephen Innes, chief global market strategist at financial services firm Axi.

Meanwhile, Boston Fed President Eric Rosengren said the U.S. economy may see a substantial turnaround this year as a result of accommodative monetary and fiscal policy, but the job market still has a lot of space for growth. there is a "disagreement between the market and the Fed", IG Market analyst Kyle Rodda said.

"Even though several strong voices from the Fed have vowed to tolerate inflation and keep rates down till the economy rebounds to satisfactory levels, the market thinks the central bank will have to taper as early as the beginning of 2022," Rodda said.

Silver XAG= fell 0.1% to $24.81 per ounce, while palladium XPD= was flat at $2,676.70 per ounce. Platinum XPT= slipped 0.2% to $1,166.82.

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