PRECIOUS-Gold edges down as rising bond yields dent appeal

BY Reuters | TREASURY | 04/21/24 09:24 PM EDT

April 22 (Reuters) - Gold prices edged lower on Monday as higher U.S. Treasury yields weighed on dollar-priced bullion, while investors kept a close watch on any potential escalation in the Middle East conflict.

FUNDAMENTALS

* Spot gold fell 0.3% to $2,381.36 per ounce, as of 0054 GMT. U.S. gold futures were down 0.7% to $2,395.80 per ounce.

* Benchmark 10-year U.S. Treasury yields edged up and were last at 4.6475%, making non-yielding bullion less attractive for investors.

* At least 34,097 Palestinians have been killed and 76,980 others injured in Israel's ongoing military offensive on the Gaza Strip since Oct.7.

* Persistent inflation and higher-for-longer interest rates were cited as key risks to financial stability in the Federal Reserve's latest survey of U.S. central bank contacts.

* Progress on bringing down inflation has "stalled" this year, Chicago Federal Reserve President Austan Goolsbee said, becoming the latest U.S. central banker to drop an earlier focus on the coming need for interest rate cuts.

* Higher interest rates reduce the appeal of holding non-yielding gold.

* Copper, gold and other metals that have notched strong gains this year will rise further fuelled by robust Chinese demand outlook and macro uncertainties.

* Silver may have the power to reach the $30-per-ounce milestone after its 26% surge in March-April on the back of gold's record run and copper's strength, even though analysts say the metal is ripe for a technical correction.

* Spot silver fell 0.6% to $28.48 per ounce, platinum was down 0.1% at $930.72, while palladium was unchanged at $1,026.44.

DATA/EVENTS (GMT) 1000 UK CBI Business Optimism Q2 1400 EU Consumer Confid. Flash April n/a UK House Price Rightmove MM, YY April

(Reporting by Sherin Elizabeth Varghese 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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