Gold steady as economic worries counter stronger Treasury yields

An employee takes granules of 99.99 percent pure gold at the Krastsvetmet non-ferrous metals plant, one of the world's largest producers in the precious metals industry, in the Siberian city of Krasnoyarsk, Russia

Gold steadied on Friday as worries over an economic slump caused by the COVID-19 pandemic countered pressure from a jump in U.S. Treasury yields on Federal Reserve Chair Jerome Powell’s offer for more inflation tolerance.

Spot gold was up 0.1% at $1,929.94 per ounce by 0117 GMT, after falling more than 1.2% on Thursday. Gold has fallen more than 0.5% so far this week.

U.S. gold futures rose 0.2% to $1,936.30.

The Fed’s new monetary policy strategy pledges to address “shortfalls” from the “broad-based and inclusive goal” of full employment and also promises to aim for 2% inflation on average.

Longer-term U.S. Treasury yields climbed to their highest levels in months on Thursday. Higher bond yields increase the opportunity cost of holding non-interest bearing gold.

Meanwhile, the dollar index rose 0.1% against a basket of major currencies.

Asian equities are likely to have a bumpy ride on Friday after U.S. stocks scaled new peaks for a third straight session.

More than 24.33 million people have been reported to be infected by the novel coronavirus globally and 826,948​ have died, according to a Reuters tally.

The number of Americans filing new claims for unemployment benefits hovered around 1 million last week, suggesting the labour market recovery was stalling as the COVID-19 pandemic drags.

U.S. House of Representatives Speaker Nancy Pelosi said after talks with White House Chief of Staff Mark Meadows on Thursday that Democrats and Republicans remained far apart over how much to spend on the next coronavirus relief legislation.

Silver eased 0.1% to $27.01 per ounce, platinum fell 0.7% to $922.07, while palladium gained 0.8% to $2,178.48.

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