Gold drops as higher equities, Treasury yields weigh

March 30, 2023 02:05 AM AEDT | By Reuters
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By Deep Kaushik Vakil

(Reuters) - Gold prices slipped on Wednesday as upbeat equities and Treasury yields weighed, but declines in safe-haven bullion have been fairly contained so far, signalling lingering worries about the banking sector.

Spot gold was trading 0.3% lower at $1,967.30 per ounce by 10:34 a.m. EDT (14:34 GMT). U.S. gold futures slipped 0.2% to $1,968.90.

Prices were weighed down by "strong equities, a strong dollar, Treasury yields are slightly higher ... and there's been no real new news of any banking issues that we don't already know about," said Bob Haberkorn, senior market strategist at RJO Futures.

The dollar gained about 0.2% against most major peers, pausing its recent declines. A stronger dollar makes bullion more expensive for overseas buyers. [USD/]

Wall Street's main indexes gained as easing worries about a banking crisis lifted risk sentiment, but the sense of optimism wasn't robust enough to severely knock safe-haven assets. [.N] [MKTS/GLOB] [US/]

"The marketplace is slowly moving beyond the U.S. and European banking troubles as risk appetite creeps back into the markets. However, veteran market watchers believe it's too soon for the 'all clear' siren regarding the matter," said Jim Wyckoff, senior analyst at Kitco Metals, in a note.

Investors will look to a key inflation gauge, the core Personal Consumption Expenditures (PCE) price index, expected at the end of the week for more clues on the Fed's monetary tightening plans.

"We're going to hover around the $2,000 (per ounce) level until we get to the next Fed meeting ... The Fed is the driver in the market for precious metals," Haberkorn said.

Investors priced about a 40% chance of a 25-basis-point hike in May, according to the CME FedWatch tool. Higher rates tend to dull zero-yield gold's appeal.

In other metals, spot silver gained 0.2% to $23.3101 per ounce, platinum up 0.4% to $967.49, while palladium added 1.8% to $1,445.37.

(Graphic: xau -

(Reporting by Deep Vakil in Bengaluru; Editing by Andrea Ricci)


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