PRECIOUS-Gold prices ease as dollar strength dulls appeal

BY Reuters | TREASURY | 07/03/22 09:17 PM EDT
    (Corrects first bullet to say U.S. gold futures rose and not
fell)
    July 4 (Reuters) - Gold prices edged lower on Monday, as an
elevated U.S. dollar hurt demand for greenback-priced bullion
and also outweighed support from weakening Treasury yields.

    FUNDAMENTALS
    * Spot gold        was down 0.2% at $1,807.19 per ounce, as
of 0101 GMT, after hitting a five-month low of $1,783.50 on
Friday. U.S. gold futures        rose 0.5% to $1,809.50.
    * The dollar        hovered close to recent two-decade
highs, continuing to make gold less attractive for buyers
holding other currencies, after playing a significant part in
bullion's worst quarterly showing in over a year.
    * Benchmark U.S. 10-year Treasury yields fell to their
lowest level in a month on Friday, buoying prices of
non-yielding bullion.
    * Asian share markets started cautiously on Monday as a run
of soft U.S. data suggested downside risks for this week's June
payrolls report, while the hubbub over possible recession was
still driving a relief rally in government bonds.

    * India has raised its basic import duty on gold to 12.5%
from 7.5%, the government said on Friday, as the world's
second-biggest consumer of the precious metal tries to dampen
demand and bring down the trade deficit.
    * Physical gold dealers in India offered steep discounts
last week as demand remained weak, with the import tax hike
likely to further sap interest, while top consumer China saw
activity bounce back slowly as it emerged from COVID-led curbs.

    * SPDR Gold Trust      , the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.8% to 1,041.9
tonnes on Friday from 1,050.31 tonnes on Thursday.
    * U.S. Federal government offices, stock and bond markets,
and the Federal Reserve will be closed on Monday for the
Independence Day holiday.
    * Spot silver        eased 0.2% to $19.82 per ounce,
platinum        fell 0.5% to $884.39, and palladium
dropped 0.6% to $1,948.50.

    DATA/EVENTS (GMT)
    0130  Australia  Building Approvals   May

 (Reporting by Bharat Govind Gautam in Bengaluru; Editing by
Sherry Jacob-Phillips)

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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