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PRECIOUS-Gold fizzles out as yields, dollar gain post U.S. inflation data

CommoditiesMay 12, 2021 20:30
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© Reuters.

* Palladium XPD= falls as much as 3%
* U.S. consumer price data beat expectations
* U.S. 10-year Treasury yields hit a high since April 13

(Adds comment, updates prices)
By Eileen Soreng
May 12 (Reuters) - Gold fell 1% in choppy trading on
Wednesday, en route to snap a five-session-long winning streak,
after April's jump in U.S. consumer prices buoyed the dollar and
U.S. Treasury yields, reducing appetite for non-yielding
bullion.
Spot gold XAU= fell 0.8% to $1,822.91 per ounce by 1:51
p.m. EDT (1751 GMT) after falling up to 1% earlier in the
session.
U.S. gold futures GCv1 settled down 0.7% at $1,822.80.
"People trading gold and silver are a little concerned that
maybe this inflation is getting a little too quick, and the Fed
did say they have tools to tamp it down. ... Traders are
concerned about what those tools may be," said Bob Haberkorn,
senior market strategist at RJO Futures.
"For this week, you're going to see caution in the gold and
silver markets."
Benchmark U.S. 10-year Treasury yields US10YT=RR jumped on
the stronger data. US/
While gold is viewed as a hedge against higher inflation
that could follow stimulus measures, higher Treasury yields have
weighed on gold, which is down over 4% for the year so far.
The dollar index .DXY was up 0.6%, making gold expensive
for holders of other currencies.
U.S. Federal Reserve Vice Chair Richard Clarida on Wednesday
said it's "not yet" time to pull back on support for the
economy, though he also added the central bank would not
hesitate to use tools if it sees risk of persistent upward drift
in inflation expectations. "You're still going to see the Fed remain stubbornly
accommodative here, and that should provide some underlying
support (to gold)," Edward Moya, senior market analyst at OANDA,
said.
"What you're going to see is that the market is going to
slowly transition to viewing gold as an inflation hedge."
Elsewhere, palladium XPD= fell as much as 3% and was last
down 2.4% at $2,867.06 per ounce, while platinum XPT= dipped
1.3% to $1,218.83.
Silver XAG= fell 1.6% to $27.17 per ounce.

PRECIOUS-Gold fizzles out as yields, dollar gain post U.S. inflation data
 

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