Gold Prices Drift Lower, Higher Bond Yields Weigh On Demand
New York (July 13) There has been further mixed currency trading with only limited impact on gold, but a renewed increase in bond yields has put some downward pressure on prices.
The dollar remained on the defensive against the yen during the US session on Wednesday, although there was choppy trading against the Euro with gold consolidating just above the $1,220 per ounce area.
During the European session on Thursday, there were source reports from the ECB that the central bank could plan to wind down the quantitative easing bond-buying programme at the September meeting.
The Euro regained some support following the reports, although there was also a significant impact in reversing earlier declines in bond yields with a small net increase in European bond yields into the US open.
Higher yields had an impact in pulling gold prices lower even though the dollar lost some ground to the Euro.
US jobless claims were close to consensus forecasts with a small decline to 247,000 in the latest week from a revised 250,000 previously.
The headline producer prices data was marginally stronger than expected with a 0.1% increase for June, although the core increase of 0.1% was also slightly lower than expected.
USD/JPY edged higher, although currencies were still confined to narrow ranges and failed to provide a major lead to gold prices.
There were no major market-moving comments from Fed Chair Yellen in the second round of congressional testimony.
Bond markets continued to edge lower which sapped support for gold as prices dipped towards $1,215 per ounce, although there was support on approach.
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