PRECIOUS-Gold stalls as rising yields, rate hike bets counter dollar dip

BY Reuters | ECONOMIC | 06/21/22 10:28 AM EDT
       * U.S. Fed Chair Powell to testify before Congress this week
    * Palladium rises over 3%
    * U.S. stock indexes open higher

 (Adds comment, details and updates prices)
    By Ashitha Shivaprasad
    June 21 (Reuters) - Gold prices were subdued on Tuesday as
rising U.S. Treasury yields and aggressive rate hike bets dimmed
bullion's appeal despite a pullback in the dollar.
     Spot gold        were flat at $1,839.00 per ounce by 10:03
a.m. ET (1403 GMT). U.S. gold futures        were little changed
at $1,840.70.
    "Treasury yields are slightly higher and there is a small
bounce back in U.S. equities, both putting some pressure on
gold. However, the dollar is down and is offering some support."
said Phillip Streible, chief market strategist at Blue Line
Futures in Chicago.
    Denting bullion's appeal, benchmark U.S. Treasury 10-year
rose and U.S. stock indexes opened higher on Tuesday.
    Capping gold's downside, however, the dollar index
fell 0.5%, making greenback-priced bullion more attractive for
overseas buyers.
    Earlier this month, the U.S. Federal Reserve announced its
biggest interest rate hike since 1994. Following suit, other
major central banks were also leaning towards aggressive
monetary policy tightening to tame soaring inflation.
    European Central Bank Chief Christine Lagarde reaffirmed
rate hike plans this week, with the Bank of England's chief
economist also echoing similar
     Inflation usually spurs safe-haven buying of gold, but
rising interest rates increase the opportunity cost of the
non-yielding bullion.
     "There are conflicting factors at play that have prevented
the metal from making a decisive move in one or the other
direction", Fawad Razaqzada, market analyst at City Index said,
adding "the fact it (gold) hasn't completely broken down means
there are other factors supporting."
    Fed Chair Jerome Powell will testify in Washington D.C.
later this week.
    "The Fed in the last meeting was at its maximum hawkishness"
and that should decelerate going forward, Blue Line's Streible
    Spot silver        rose 1.3% to $21.86 per ounce, platinum
       gained 1.3% to $943.58, and palladium        rose 3% to
$1,902.07 per ounce.

 (Reporting by Ashitha Shivaprasad and Arundhati Sarkar in
Bengaluru; Editing by Amy Caren Daniel)

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