PRECIOUS-Gold dips as higher dollar, U.S. bond yields weigh

BY Reuters | ECONOMIC | 06/21/22 09:21 PM EDT
       June 22 (Reuters) - Gold eased on Wednesday, as the dollar
and Treasury yields firmed, but prices were range-bound as
investors awaited fresh cues on top central banks' monetary
policy plans, especially from the U.S. Federal Reserve.

    FUNDAMENTALS
    * Spot gold        fell 0.3% to $1,827.69 per ounce by 0101
GMT, extending losses to a fourth straight session. U.S. gold
futures        dropped 0.5% to $1,830.20.
    * The dollar        strengthened, making greenback-priced
bullion more expensive for buyers holding other currencies.

    * The Fed will likely deliver another 75 basis point (bp)
interest rate hike in July, followed by a 50 bp rise in
September, and won't scale back to quarter percentage point
moves until November at the earliest, according to economists
polled by Reuters.
    * Higher interest rates and bond yields increase the
opportunity cost of holding gold, which yields nothing.
    * Benchmark U.S. 10-year Treasury yields             also
rose, making bullion less appealing.
    * Market participants will likely be keeping an eye on Fed
Chair Jerome Powell's testimonies in Washington D.C. this week.

    * European Union leaders aim to maintain pressure on Russia
at their summit this week by committing to further work on
sanctions, a draft document showed, with gold among assets that
may be targeted in a possible next round of
measures.
    * Euro zone governments should not expect unconditional
support under the European Central Bank's new tool to stop
borrowing costs from rising too far for the most indebted
countries, two ECB policymakers said on Tuesday.
    * SPDR Gold Trust      , the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.16% to 1,073.80
tonnes on Tuesday from 1,075.54 tonnes on Friday.
    * Spot silver        dipped 0.8% at $21.50 per ounce,
platinum        fell 0.5% to $932.79, and palladium
dropped 0.6% to $1,867.02.

    DATA/EVENTS (GMT)
    0600  UK  CPI YY                  May
    1400  EU  Consumer Confid. Flash  June

 (Reporting by Bharat Govind Gautam in Bengaluru; Editing by
Rashmi Aich)

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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