PRECIOUS-Gold dips on higher yields, faces third straight weekly fall

BY Reuters | TREASURY | 06/30/22 09:22 PM EDT
       July 1 (Reuters) - Gold prices edged lower on Friday, and
were on track for a third straight weekly decline, as rising
U.S. Treasury yields weighed on demand for zero-yield bullion.

    FUNDAMENTALS
    * Spot gold        was down 0.1% at $1,805.39 per ounce, as
of 0103 GMT, after hitting a more than six-week low of $1,801.50
in the previous session. U.S. gold futures        were flat at
$1,806.40.
    * Gold prices, coming off their worst quarter since early
2021 due to hawkish central banks and a soaring U.S. dollar,
have lost about 1.2% this week.
    * A stronger dollar        makes gold more expensive for
buyers holding other currencies.
    * Benchmark U.S. 10-year Treasury yields rose after falling
to their lowest since June 7 on Thursday.
    * New U.S. data for May showed little immediate relief from
the record pace of inflation pushing the Federal Reserve toward
another oversized interest rate increase next month, but it did
add to a developing sense that the worst may be over.

    * Higher interest rates raise the opportunity cost of
holding bullion, which yields no interest.
    * SPDR Gold Trust      , the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.22% to 1,050.31
tonnes on Thursday from 1,052.63 tonnes on Wednesday.
    * Spot silver        eased 0.1% to $20.23 per ounce, and has
dropped about 4.1% this week, its most since mid-May.
    * Platinum        rose 0.2% to $895.50, but faces a fourth
consecutive weekly fall of about 1.4%.
    * Palladium        dropped 0.3% to $1,920.53, but has gained
about 2.8% this week.

    DATA/EVENTS (GMT, June)
    0145  China   Caixin Mfg PMI Final
    0750  France  S&P Global Mfg PMI
    0755  Germany S&P Global/BME Mfg PMI
    0800  EU      S&P Global Mfg Final PMI
    0830  UK      S&P GLBL/CIPS Mfg PMI
    0900  EU      HICP Flash YY
    0900  EU      HICP-X F&E Flash YY
    1345  US      S&P Global Mfg PMI Final
    1400  US      ISM Manufacturing PMI

 (Reporting by Bharat Govind Gautam in Bengaluru; Editing by
Subhranshu Sahu)

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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