Gold inches down as U.S. bond yields bounce back

Gold dipped slightly on Tuesday, as a

recovery in U.S. Treasury yields from last week’s one-month lows

reduced the appeal of non-yielding bullion, with a strong dollar

also piling on.

FUNDAMENTALS

* Spot gold was down 0.1% at $1,807.93 per ounce, as

of 0101 GMT. U.S. gold futures rose 0.4% to $1,808.50.

* Resuming trade after a weekend extended by the

Independence Day holiday on Monday, benchmark U.S. 10-year

Treasury yields firmed, weighing on prices of bullion.

* Gold prices fell in the previous session on prospects of

interest rate hikes from central banks that are trying to take

on inflation, but managed to stay above the $1,800 price support

level.

* Higher interest rates and bond yields raise the

opportunity cost of holding non-yielding bullion.

* Spot gold had touched a five-month low of $1,783.50 on

Friday.

* The dollar steadied at elevated levels on Tuesday,

making gold less appealing for buyers holding other currencies.

* World stocks, meanwhile, rose in holiday-thinned trade on

Monday, helped by a bounce in oil as concerns over tight supply

outweighed recession fears.

* Ukrainian President Volodymyr Zelenskiy said on Monday his

armed forces were undeterred in their efforts to “break”

Moscow’s will to pursue a nearly five-month war, while Russia’s

Vladimir Putin hailed his military’s victory in the grueling

battle of Luhansk.

* Spot silver firmed 0.2% to $19.99 per ounce, while

platinum fell 0.2% to $883.94, and palladium

gained 0.5% to $1,932.22.

DATA/EVENTS (GMT)

0145 China Caixin Services PMI June

0430 Australia RBA Cash Rate July

0500 India S&P Global Svcs PMI June

0750 France S&P Global Svcs, Comp PMIs June

0755 Germany S&P Global Svcs PMI June

0755 Germany S&P Global Comp Final PMI June

0800 EU S&P Global Svcs, Comp Final PMIs June

0830 UK Reserve Assets Total June

1400 US Factory Orders MM May

(Reporting by Bharat Govind Gautam in Bengaluru; editing by

Uttaresh.V)