Gold Sags as Yellen Cites Prospect for Sharp Jump in Bond Yields

PT. Equityworld Futures - Gold fell for first time this week as Federal Reserve Chair Janet Yellen said bond yields “could see a sharp jump” after the central bank raises interest rates, crimping demand for the metal as an alternate investment.
Gold declined in the past two months as speculation mounted that the Fed’s benchmark rate would increase. Treasury yields have been held down by the three rounds of large-scale asset purchases that have swelled the central bank’s balance sheet by $4.47 trillion.
Higher borrowing costs cut gold’s allure because the metal generally offers returns only through prices gains, sending investors to assets with better yield prospects such as bonds. Traders are parsing economic data to assess the outlook for the timing of a rate increase. The government on May 8 releases statistics on jobs.
Gold futures for June delivery fell 0.2 percent to settle at $1,190.30 an ounce at 1:46 p.m. on the Comex in New York. Aggregate trading was 24 percent below the 100-day average, data compiled by Bloomberg show. The price rose 1.6 percent in the past two days.
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Gold Rises for Second Day as Oil Rally Spurs Inflation Concerns

PT. Equityworld Futures - Gold futures rose for the second straight day as higher energy costs added to speculation that U.S. inflation will start to pick up, reviving demand for the precious metal as a store of value.
Crude oil in New York rose above $60 a barrel for the first time since December. In April, the price soared 25 percent, the most since May 2009, on signs the U.S. supply glut is easing. Investors who in December were unloading gold and bracing for deflation are now stepping up bets that inflation is returning. The dollar’s rally has stalled, and American wages are rising.
Holdings in exchange-traded funds backed by gold are rebounding, and speculators are getting more bullish. The metal has gained 4.5 percent from this year’s low in March as investors weigh expectations for higher consumer costs against signs that the Federal Reserve is getting closer to raising interest rates.
Gold futures for June delivery rose 0.5 percent to settle at $1,193.20 an ounce at 1:53 p.m. on the Comex in New York. On Monday, the price climbed 1 percent, the most in a week.
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Gold Near 6-week Low on Stronger Dollar, US Rate Hike Fears

PT. Equityworld Futures - Gold languished near a six-week low on Monday, unable to recover from a three-day losing streak, as the dollar gained on signs of stabilisation in the U.S. economy, and fears the Federal Reserve would soon hike interest rates.
Spot gold was firm at $1,178.50 an ounce by 0042 GMT, not far from a six-week low of $1,170.20 reached on Friday.
The metal has lost about 2 percent in the past three sessions since the Fed signalled on Wednesday that it saw the recent slowdown in the U.S. economy as transitory and was not ruling out an interest rate rise this year.
A strong economy diminishes gold's appeal as a haven, while higher rates could dent demand for non-interest-paying bullion.
The Fed could raise interest rates as soon as June, two top U.S. central bankers said on Friday, so long as economic data strengthens as expected from a dismal first quarter.
That view is at odds with the view of many traders, whose bets in the interest-rate futures markets suggest they have all but discounted a June rate hike and now expect the Fed to wait until December before raising rates for the first time since 2006.
Data on Friday continued to show mixed U.S. economic data. Consumer sentiment rose but manufacturing and construction was weak.
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Gold Futures Rebound From 6 Week Low Amid China Stimulus Bets

PT. Equityworld Futures - Gold futures recovered from a six-week low amid speculation that weaker economic growth will prompt officials to add to stimulus in China, which rivals India as the world’s top bullion buyer.

Futures are rebounding after three weeks of declines. The Federal Reserve has damped speculation that it will delay boosting interest rates. Traders are awaiting the April U.S. payrolls report on Friday for more signals on the timing of increases for borrowing costs. Higher rates drive investors to favor assets that pay interest, such as bonds, curbing gold’s appeal as a store of value, since it generally offers returns only through price gains.

On the Comex in New York, gold futures for June delivery rose 1 percent to settle at $1,186.80 an ounce at 1:47 p.m. On May 1, the price touched $1,168.40, the lowest for a most-active contract since March 20.

Employers in the U.S. added 225,000 workers last month, up from 126,000 in March, according to the median estimate in a Bloomberg survey of economists before the Labor Department report on May 8. The unemployment rate may decline to 5.4 percent from 5.5 percent.

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