Gold futures held small gains on Thursday, gaining momentum after dovish comments from Federal Reserve Chairman Jerome Powell put some pressure on yields on Treasuries and the US dollar. Gold for June delivery GC00, + 0.25% GCM21, + 0.25% was up $ 6, or 0.3%, to $ 1,779.90 an ounce on Comex. May silver SIK21, + 1.17%, was up 35 cents, or 1.3%, to $ 26,435 an ounce.
Powell reiterated that policymakers were not yet ready to think about curtailing extraordinary monetary stimulus, while dismissing signs of rising inflation as transitory. That put pressure on US dollar and Treasury yields, and the dollar’s slide, in particular, lent support to gold. But gains for gold were trimmed as yields rose again, with the 10-year rate BX: TMUBMUSD10Y up 4 basis points at 1,663%. Higher returns increase the opportunity cost of holding non-performing assets, such as gold. “One more time, [Powell] described the rise in inflation as temporary. The US dollar and bond yields fell accordingly, allowing gold to gain. That said, bond yields are now rising again, causing gold to drop to $ 1,780, ”Commerzbank analyst Carsten Fritsch said in a note. Global demand for gold in the first quarter fell from a year ago due to a more than 70% year-over-year decline in gold investments, according to a World Gold Council report released Thursday. The WGC said total global gold demand for the quarter was 815.7 metric tons, down 23% compared to the first quarter of 2020, although it was “on par” with the fourth quarter of 2020.