Gold rises on drop in Treasury yields, bargain-hunting

Gold rose on Wednesday after dropping to more than a one-week low in the previous session, boosted by a fall in longer-dated U. S. Treasury yields and bargain-hunting even as investors await a possible resumption of U. S. -Iranian peace talks. Spot gold was up 0. 5% at $4, 732. 79 per ounce by 11: 17 a. m. EDT (1517 GMT), after rising 1% earlier in the session. On Tuesday, it recorded its largest daily loss since March 26. U. S. gold futures for June delivery gained 0. 7% to $4, 750. 20. Benchmark 10-year U. S. Treasury yields fell 0. 2%. Gold is seeing “a bit of a reprieve as rates along the curve dropped here and on the hope that the Strait of Hormuz business gets worked out after Donald Trump’s statements. But the situation is very tenuous and uncertain, ” said Bart Melek, global head of commodity strategy at TD Securities. READ MORE: Gold slips ahead of tentative US-Iran talks Iran seized two ships in the Strait of Hormuz on Wednesday, while U. S. President Donald Trump said the U. S. blockade of Iran would continue and a source briefed on the matter said he had not set a timeline for the ceasefire. There was no sign of peace talks restarting, however. The Israel-Lebanon ceasefire also faced pressure as at least three people were killed in Israeli drone attacks in Lebanon. “Perceived bargain-hunting after Tuesday’s losses is also featured in (gold and silver) precious metals markets, ” said Jim Wyckoff, senior analyst at Kitco Metals. Gold prices have fallen close to 11% since the U. S. -Israeli war on Iran began on February 28, as rising oil prices have stoked inflation fears. While bullion is seen as an inflation hedge, higher interest rates dampen demand for the non-yielding metal. Federal Reserve chief nominee Kevin Warsh said on Tuesday he had made no promises to Trump about cutting interest rates, as he tried to assure U. S. senators considering his confirmation that he would act independently of the White House while pursuing broad reforms. Spot silver rose 1. 5% to $77. 84 per ounce, platinum gained 1. 4% to $2, 064. 95, and palladium was up 1% at $1, 548. 34.

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