PRECIOUS-Gold pressured by firmer dollar, higher U.S. yields

BY Reuters | ECONOMIC | 09/27/21 11:13 AM EDT

* 10-year Treasury yields at three-month high

* Silver up 1%

* Gold could see some reprieve in near-term - analyst (Recasts, adds comments, updates prices)

By Brijesh Patel

Sept 27 (Reuters) - Gold prices edged lower on Monday, weighed down by a stronger dollar and an uptick in U.S. Treasury yields, while investors awaited speeches from Federal Reserve policymakers for more clues on the tapering strategy.

Spot gold was down 0.1% at $1,748.86 per ounce by 10:53 am EDT (1453 GMT).

U.S. gold futures were steady at $1,751.70.

"We're still having some concerns out there that is keeping the safe haven bid alive on dips. But we continue to see the dollar making gains and keeping a little bit of pressure on the commodities complex, most notably gold," said David Meger, director of metals trading at High Ridge Futures.

The dollar was up 0.1% against its rivals, making gold more expensive for other currency holders, while benchmark 10-year U.S. Treasury yields rose to their highest level in three months.

Market focus will now be on speeches by Fed officials this week including Chair Jerome Powell, who will testify before Congress on the central bank's policy response to the pandemic.

"Every time we have any Fed officials speak, we're looking to get some more information. At this point, the expectation is that in next meeting they're (Fed) going to announce some type of taper," Meger said.

Gold is often considered a hedge against higher inflation, but a Fed rate hike would increase the opportunity cost of holding gold, which pays no interest.

Investors were also keeping an eye on developments surrounding debt-laden China Evergrande, after the Chinese property giant missed a bond payment deadline last week.

"With downside momentum seemingly slowing, gold could see some reprieve in the near-term but the broader outlook isn't great," OANDA analyst Craig Erlam said in a note.

Elsewhere, silver rose 1% to $22.63 per ounce. Platinum eased 0.1% to $981.04, while palladium fell 0.5% to $1,962.15. (Reporting by Brijesh Patel in Bengaluru; Editing by Shailesh Kuber)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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