PRECIOUS-Gold steadies off recent lows on dollar, yields pullback

BY Reuters | TREASURY | 11/22/22 11:11 AM EST

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Fed's November meeting minutes due on Wednesday

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Platinum seen in deficit in 2023 - WPIC

(Adds comment, updates prices)

By Seher Dareen

Nov 22 (Reuters) - Gold prices on Tuesday steadied above last session's low as a retreat in the dollar and benchmark U.S. Treasury yields was offset by a rise in equities, while investors awaited cues on the U.S. Federal Reserve's monetary policy path.

Spot gold were unchanged at $1,737.19 per ounce by 2:04 p.m. ET (1904 GMT), while U.S. gold futures settled broadly unchanged at $1,739.9.

"I think the metals work their way out of this and continue to move higher. But right now it is a direct correlation with interest rates," said Daniel Pavilonis, senior market strategist at RJO Futures.

Major cities in China tightened COVID-19 curbs as virus cases spiked in the world's biggest consumer of the metal.

Global equities rose as Wall Street's main indexes gained on easing worries of a dull holiday season for retailers.

U.S. Treasury yields eased and the dollar also slipped, while investors waited for clues from the Fed's minutes due tomorrow.

"Gold got a little boost from the weaker dollar but that appears to be fading quickly," said Edward Moya, senior analyst with OANDA, in a note.

"The Fed is likely to stick to the hawkish script for a while and unless we see a major improvement with China's COVID situation, gold should struggle to muster up a meaningful rally."

Cleveland Fed President Loretta Mester said on Monday the central bank can downshift to smaller interest rate hike increments from next month, while San Francisco Fed President Mary Daly stated the policy rate was "modestly restrictive" with "more work to do."

While gold is considered an inflation hedge, high interest rates discourage investing in non-yielding bullion.

In other metals, spot silver rose 0.9% to $21.04 per ounce, platinum gained 0.5% to $987.32 while palladium fell 0.3% to $1,859.06. (Reporting by Seher Dareen in Bengaluru; Editing by Krishna Chandra Eluri)

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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