PRECIOUS-Gold edges up as U.S. yields soften

Reuters

Warning: This material has been prepared by a third party company, Reuters, which is independent of Davy. Davy has not reviewed the material and accepts no responsibility for errors or omissions, or for the information or opinions contained therein. It does not constitute investment advice.

    * Citi lowers 2021 gold price forecast
    * Dollar index holds near four-week peak
    * Silver drops to over one-month low

 (Updates prices)
    By K. Sathya Narayanan
    March 2 (Reuters) - Gold prices edged up on Tuesday, having
earlier slid to its lowest in 8-1/2 months, as U.S. Treasury
yields eased and offset pressure from a stronger dollar.
    Spot gold  XAU=  was up 0.3% at $1,728.09 per ounce by 1324
GMT, after falling to $1,706.70, its lowest since June 15. U.S.
gold futures  GCv1  rose 0.6% to $1,733.30 per ounce.
    "We have a bit of a pause in the (rally) in U.S. yields
now," said ABN Amro analyst Georgette Boele. 
    There is some nervousness in the market as investors were
aggressively long in gold and bought it at higher prices,
betting that prices would revisit the highs around $2,000, which
hasn't happened yet, Boele added.
    Benchmark U.S. Treasury yields  US10YT=RR  have eased off a
one-year high hit last week, while the dollar index held near a
four-week peak.  US/  USD/ 
    "The strength of the greenback is increasing the bearish
pressure on gold," ActivTrades chief analyst Carlo Alberto De
Casa said in a note.
    While gold is considered a shield against inflation, higher
yields had threatened that status as they increase the
opportunity cost of holding bullion.
    "Diversification out of fixed income into gold can continue,
especially if the focus around inflation overshoot risks
increases," Goldman Sachs Commodities Research said in a note
dated Monday.  
    Focus also remains on the developments of the $1.9 trillion
stimulus bill that will be debated in the U.S. Senate this week.
 urn:newsml:reuters.com:*:nL2N2KZ10A
    Citi analysts lowered their 2021 gold price forecast to
$1,800 per ounce and said that "spot bullion holding support at
$1,750-$1,765 appears critical to avoid a sharper sell-off amid
higher U.S. yields."
    Silver  XAG=  fell 0.5% to $26.34 an ounce, having earlier
dipped to a more than one-month low. 
    Palladium  XPD=  was up 0.4% at $2,359.25 an ounce, while
platinum  XPT=  eased 0.5% to $1,178.83.

 (Reporting by K. Sathya Narayanan in Bengaluru; editing by
David Evans and Jason Neely)
 ((Sathya.Narayanan@thomsonreuters.com; within U.S. +1 646 223
8780, outside U.S. +91 80 6182 2732; Reuters Messaging:
sathya.narayanan.thomsonreuters.com@reuters.net))

Warning: This content may be provided by regulated and unregulated entities and is not created, reviewed or endorsed by Davy. It is provided for general information purposes only and does not constitute a recommendation or solicitation to purchase or sell any security or make any other type of investment or investment decision. Importantly, it does not constitute investment advice, as it does not contemplate the personal circumstances of any particular person or group of persons. Neither Davy nor the providers of the Third Party Content will be liable for any investment decision made based on the reliance on or use of such data, or any liability that may arise due to delays or interruptions in the delivery of the Third Party Content for any reason.