PRECIOUS-Gold prices flat as rise in U.S. bond yields weighs

BY Reuters | TREASURY | 06/27/22 09:20 PM EDT
       June 28 (Reuters) - Gold prices were nearly flat on Tuesday,
as recent gains in Treasury yields prevented any significant
interest in bullion.

    FUNDAMENTALS
    * Spot gold        was last up 0.1% at $1,824.65 per ounce
by 0056 GMT. U.S. gold futures        were flat at $1,824.70.
    * A move by Britain, the United States, Japan and Canada to
ban new imports of Russian gold is being seen as largely
symbolic within the global bullion market, as Russian exports to
the West have already dried up.
    * SPDR Gold Trust      , the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.44% to 1,056.40
tonnes on Monday from 1,061.04 tonnes a day earlier.
    * China's net gold imports through Hong Kong jumped 58.3% in
May from the previous month, Hong Kong' official data showed on
Monday, as pandemic-related curbs were relaxed in major cities.

    * The U.S. dollar struggled against its major rivals on
Monday as softening inflation expectations prompted a
reassessment of the prospects for aggressive interest rate hikes
but volatile markets cushioned a broader decline.

    * A weaker dollar makes gold more attractive for buyers
holding other currencies.
    * Although gold is considered an inflation hedge by many,
higher interest rates and bond yields raise the opportunity cost
of holding bullion, which yields no interest.
    * Benchmark U.S. 10-year Treasury yields steadied after
gains in the previous session, limiting demand for gold.
    * New orders for U.S.-made capital goods and shipments
increased solidly in May, pointing to sustained strength in
business spending on equipment in the second quarter, but rising
interest rates and tighter financial conditions could slow
momentum.
    * Spot silver        dipped 0.1% to $21.13 per ounce, and
platinum        eased 0.1% to $907.38, while palladium
rose 0.4% to $1,878.18.

    DATA/EVENTS (GMT)
    1400  US  Consumer Confidence  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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