PRECIOUS-Gold retreats from 3-week peak as dollar gains ground

BY Reuters | TREASURY | 10/03/22 10:15 PM EDT

Oct 4 (Reuters) - Gold prices edged lower on Tuesday, having touched a nearly three-week high earlier in the session, as a firmer dollar dimmed the appeal of greenback-priced bullion and countered support from lower U.S. Treasury yields.

FUNDAMENTALS

* Spot gold was down 0.2% at $1,696.04 per ounce, as of 0135 GMT, having touched its highest since Sept. 14 at $1,702.39 earlier in the day.

* U.S. gold futures rose 0.2% to $1,705.7.

* The dollar index edged up 0.1%, after hitting its lowest level since Sept. 23 overnight.

* Benchmark U.S. 10-year Treasury yields held close to a 1-1/2-week low touched on Monday.

* U.S. manufacturing activity grew at its slowest pace in nearly 2-1/2 years in September as new orders contracted amid aggressive interest rate increases from the Federal Reserve to cool demand and tame inflation.

* Federal Reserve Bank of New York President John Williams said on Monday that while there have been nascent signs of cooling inflation, underlying price pressures remain too high, which means the U.S. central bank must press forward to get inflation under control.

* Although gold is seen as a hedge against inflation, higher interest rates increase the opportunity cost of holding bullion that pays no interest.

* India has raised total import duty on platinum to 15.4% from 10.75%, the government said in a notification on Monday, seeking to bring parity in import duty structure between gold and platinum.

* Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.34% to 942.89 tonnes on Monday from 939.70 tonnes on Friday.

* Spot silver dipped 0.5% to $20.64 per ounce, platinum dropped 0.3% to $899.50 and palladium was up 0.7% at $2,236.84.

DATA/EVENTS (GMT)

0030 Australia Building Approvals Aug

0030 Australia Building Approvals Total YY Aug

0030 Australia Owner-Occp'd Hous'g Fin MM Aug

0030 Australia Invest Hous'g Fin MM Aug

0330 Australia RBA Cash Rate Oct

1400 US Factory Orders MM Aug (Reporting by Eileen Soreng 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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