By Seher Dareen
(Reuters) – Gold slipped 1% to a two-week low on Thursday pressured by elevated U.S. Treasury yields and firmer risk appetite, with investors expecting aggressive policy tightening by the Federal Reserve.
Spot gold was down 0.6% to $1,944.85 per ounce by 1437 GMT, after hitting its lowest level since April 8.
U.S. gold futures shed 0.5% to $1,946.10.
San Francisco Fed President Mary Daly on Wednesday said she believes the case for a half-percentage-point rate hike next month is “complete” and “solid,” with the Fed’s rate hike path this year broadly seen as appropriate in the face of high inflation.
Gold is seeing a correction following the climb to near the $2,000 level since the market is expecting the Fed to be more aggressive in hiking rates, while yields are also moving up, said Bart Melek, head of commodity strategies at TD Securities.
While gold is considered a hedge against inflation, rising interest rates increase the opportunity cost of holding the non-yielding bullion.
Investors await policy updates from European Central Bank President Christine Lagarde and Fed Chair Jerome Powell at an International Monetary Fund panel later on Thursday.
Benchmark U.S. 10-year Treasury yields edged towards the more than three-year peak scaled on Wednesday, as bond markets suffered another sharp sell-off amid the bets for aggressive rate hikes. [US/][USD/]
Improved appetite for riskier assets also weighed on bullion. [.N]
Gold came within striking distance of the key $2,000 level on Monday as concerns around the Russia-Ukraine conflict and rising inflationary environment spurred safe-haven demand, although prices have retreated since then.
On the technical front, gold is consolidating around $1,940-$1,960 per ounce, and beyond that, could find good support around $1,915-$1,930, said Brian Lan, managing director at dealer GoldSilver Central.
Spot silver fell 2.1% to $24.64 per ounce, having earlier hit a two-week trough. Platinum was down 1.3% to $974.61, and palladium fell 0.3% to $2,444.71.
(Reporting by Eileen Soreng, Seher Dareen, and Ashitha Shivaprasad in Bengaluru; Editing by Paul Simao)
