PRECIOUS-Gold inches down as U.S. bond yields bounce back

BY Reuters | TREASURY | 07/04/22 09:29 PM EDT
       July 5 (Reuters) - Gold dipped slightly on Tuesday, as a
recovery in U.S. Treasury yields from last week's one-month lows
reduced the appeal of non-yielding bullion, with a strong dollar
also piling on.

    FUNDAMENTALS
    * Spot gold        was down 0.1% at $1,807.93 per ounce, as
of 0101 GMT. U.S. gold futures        rose 0.4% to $1,808.50.
    * Resuming trade after a weekend extended by the
Independence Day holiday on Monday, benchmark U.S. 10-year
Treasury yields firmed, weighing on prices of bullion.
    * Gold prices fell in the previous session on prospects of
interest rate hikes from central banks that are trying to take
on inflation, but managed to stay above the $1,800 price support
level.
    * Higher interest rates and bond yields raise the
opportunity cost of holding non-yielding bullion.
    * Spot gold had touched a five-month low of $1,783.50 on
Friday.
    * The dollar        steadied at elevated levels on Tuesday,
making gold less appealing for buyers holding other currencies.

    * World stocks, meanwhile, rose in holiday-thinned trade on
Monday, helped by a bounce in oil as concerns over tight supply
outweighed recession fears.
    * Ukrainian President Volodymyr Zelenskiy said on Monday his
armed forces were undeterred in their efforts to "break"
Moscow's will to pursue a nearly five-month war, while Russia's
Vladimir Putin hailed his military's victory in the gruelling
battle of Luhansk.
    * Spot silver        firmed 0.2% to $19.99 per ounce, while
platinum        fell 0.2% to $883.94, and palladium
gained 0.5% to $1,932.22.

    DATA/EVENTS (GMT)
    0145  China      Caixin Services PMI               June
    0430  Australia  RBA Cash Rate                     July
    0500  India      S&P Global Svcs PMI               June
    0750  France     S&P Global Svcs, Comp PMIs        June
    0755  Germany    S&P Global Svcs PMI               June
    0755  Germany    S&P Global Comp Final PMI         June
    0800  EU         S&P Global Svcs, Comp Final PMIs  June
    0830  UK         Reserve Assets Total              June
    1400  US         Factory Orders MM                 May

 (Reporting by Bharat Govind Gautam in Bengaluru; editing by
Uttaresh.V)

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.

fir_news_article