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PRECIOUS-Gold eases as U.S. yields hold firm; inflation data in focus

Credit: REUTERS/MICHAEL DALDER

Gold prices eased on Monday as U.S. Treasury yields remained elevated, denting the appeal of bullion, while investors waited for this week's key U.S. inflation and retail sales data.

* Markets look to U.S. CPI data on Tuesday

* U.S. producer prices hit 9-1/2-year high

* U.S. economy at an "inflection point" - Fed Chair Jerome Powell (New throughout, adds comments, updates prices)

By Sumita Layek

April 12 (Reuters) - Gold prices eased on Monday as U.S. Treasury yields remained elevated, denting the appeal of bullion, while investors waited for this week's key U.S. inflation and retail sales data.

Spot gold was 0.1% lower at $1,740.90 per ounce by 0950 GMT. U.S. gold futures eased 0.2% to $1,742.10.

As long as yields are relatively high, gold will not benefit, ABN Amro analyst Georgette Boele said, adding that the market is now focused on U.S. March Consumer Price Index data due on Tuesday.

Benchmark U.S. Treasury yields gained after data on Friday showed U.S. producer prices in March registered their largest annual gain in 9-1/2 years, likely marking the start of higher inflation as the economy reopens.

Retail sales data is also due on Thursday.

While gold is considered a shield against inflation, higher yields have of late threatened that status, since they translate into a higher opportunity cost of holding bullion.

Federal Reserve Chair Jerome Powell said the U.S. economy is at an "inflection point," with hopes that inflation and hiring will accelerate in the coming months.

A new Fed framework builds in allowances for inflation to run above the central bank's 2% target for a time without the Fed intervening to rein it in.

StoneX analyst Rhona O'Connell said gold would likely benefit if inflation became much higher than the target.

"(Although) if we do start seeing inflation accelerating and people start thinking interest rates are going to go up again, then gold might struggle a bit."

Among other precious metals, silver fell 0.2% to $25.18, palladium was down 0.7% at $2,622.19, while platinum slipped 1% to $1,186.27. (Reporting by Sumita Layek in Bengaluru; Editing by Kirsten Donovan) ((Sumita.Layek@thomsonreuters.com; Within U.S. +1 646 223 8780, Outside U.S. +91 8061822693; Reuters Messaging: Sumita.Layek.thomsonreuters.com@reuters.net)) Keywords: GLOBAL PRECIOUS/ (UPDATE 4)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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