Home Finance Gold retreats from near five-month peak on strong yields, equities

Gold retreats from near five-month peak on strong yields, equities

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(Reuters) – Prices on Wednesday retreated from five-month highs marked in the previous session, as bond yields increasingly weighed on the safe-haven metal, while strong US economic data prompted a turnaround in riskier assets.

fundamentals

* spot It was down 0.1% at $1,898.58 an ounce as of 0053 GMT, hitting its highest level since January 8 at $1,916.40 on Tuesday.

* US Futures fell 0.2% to $1,901.90 an ounce.

* Data showed US manufacturing activity picked up in May as orders spurred demand in a reopening economy. But the unfinished work piled up due to lack of raw material and labor.

* The US 10-year Treasury yield rose to a more than one-week high overnight, adding to the opportunity cost of holding interest-free gold. [US/]

* A sense of risk in the broader final Investors weighed in on the latest US economic data for signs of a rebound and a higher inflation reading. [MKTS/GLOB]

* Euro zone inflation surpassed the European Central Bank’s elusive target in May, posing a communication challenge for policymakers, who will live happily with higher prices for now but could face backlash from angry consumers .

* High inflation is exacerbating the plight of savers and the ECB must respond by raising its interest rates to 0%, Bavaria’s Finance Minister Albert Feuerker told the daily Bild in comments published on Wednesday.

* Market participants this week will focus on US payrolls data on Friday for further clarity on economic recovery and near-term Federal Reserve policy action.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.3% to 1,045.83 tonnes on Tuesday, from 1,043.21 tonnes on Friday. [GOL/ETF]

* Palladium was down 0.1% at $2,856.82 an ounce, silver was down 0.1% at $27.88 and platinum was steady at $1,191.51.

Data/Events (GMT)

0130 Australia Real GDP QQ, YY SA Q1

1200 BRAZILIAN INDUSTRIAL PRODUCTION MM, YY APR

1800 US Federal Reserve Issues Beige Book

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(Reporting by Brijesh Patel in Bengaluru, Editing by Sherry Jacob-Phillips)

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is generated automatically from a syndicated feed.)

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