Gold Gains as U.S. Bond Yields Retreat; U.S. Inflation Data in Focus

GOLD - JAKARTA. Gold prices edged higher on Wednesday as a pullback in U.S. Treasury yields and a weaker dollar offered support to the safe-haven metal ahead of U.S. inflation data.

Spot gold was up 0.3% at $1,830.63 per ounce by 1323 GMT. U.S. gold futures were 0.2% higher at $1,830.70.

Benchmark 10-year U.S. Treasury yields slipped from the November 2019 high reached in the last session, while the dollar was down 0.1% against its rivals. Lower bond yields reduce the opportunity cost of holding non-interest bearing gold.

Spot gold prices are attempting to retest the $1,830 resistance region that has repelled bullion bugs on several occasions since July 2021, said Extinity analyst Han Tan.

"Prices must also contend with the implications of Thursday's U.S. inflation figures, whereby more evidence of persisting inflationary pressures that rouses the Fed into a more aggressive policy stance could dampen the precious metal's allure."

Analysts expect gold prices to largely stay around current levels until the release of the January inflation data, which could offer more clues on the pace of interest rate increases. While a robust inflation reading is expected to burnish gold's mettle as an inflation hedge, U.S. interest rate increases would raise its opportunity cost as a non-yielding asset.

"Gold and silver futures prices are a bit higher in early U.S. trading session, as the technical charts for both metals have seen improvement this week, which is inviting speculators to the long side of the markets," Jim Wyckoff, senior analyst at Kitco Metals, wrote in a note.

Among other metals, silver edged up 0.4% to $23.27 per ounce, having hit its highest since Jan. 27. Platinum was steady at $1,032.90 and palladium rose 0.9% to $2,268.18.

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