PRECIOUS-Gold ticks up as dip in U.S. yields loosens dollar's grip

BY Reuters | TREASURY | 05/16/22 11:18 AM EDT
       * Dollar holds near 20-year high against peers
    * Palladium likely to move back into deficit - Johnson
Matthey (JMPLF)

 (Adds details, comments; updates prices)
    By Ashitha Shivaprasad
    May 16 (Reuters) - Gold rose slightly on Monday as a retreat
in U.S. Treasury yields offset headwinds from a relatively firm
dollar, which, along with looming interest rate hikes, earlier
pushed bullion to a more than three-and-a-half-month low.
    Spot gold        edged up 0.2% to $1,814.99 per ounce as of
10:41 a.m. ET, after earlier hitting its lowest since Jan. 31 at
$1,786.60. U.S. gold futures        rose 0.2% to $1,812.10.
    Gold's slight bounce was attributable to a dip in Treasury
yields and a small pullback in the dollar, RJO Futures senior
market strategist Bob Haberkorn said, adding that the overall
trend for the dollar was "still high as the Fed is being
aggressive with its rate hikes".
    "All things considered, gold is holding up, it should be
significantly lower ... it will find support slightly below the
$1,800 level. Also, there is enormous demand for physical gold
and silver."
    The dollar        inched lower, but still held near a
two-decade peak, making gold expensive for overseas buyers.

    Although gold is considered a hedge against inflation,
higher interest rates to tame rising prices curb appetite for
bullion, which pays no interest.
    "Many still regard gold as being significantly undervalued,
and would be even more wiling to buy the metal now that prices
have weakened," Fawad Razaqzada, market analyst at City Index,
    Spot silver        gained 2% to $21.48 per ounce, after
hitting its lowest since July 2020 on Friday.
    Silver has found itself caught up in the broader sell-off in
equities and gold, being punished for being an industrial metal
at a time when growth forecasts are being trimmed, Rupert
Rowling, market analyst at Kinesis Money, said.
    Platinum        rose 0.1% to $939.66 and palladium
was up 1.7% to $1,976.68.
    Auto catalyst maker Johnson Matthey (JMPLF)          said a surplus
in the platinum market should shrink this year and the palladium
markets are likely to move back into deficit.

 (Reporting by Ashitha Shivaprasad and Swati Verma in Bengaluru;
Editing by Shounak Dasgupta)

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.

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