Gold rises from March lows as traders await more Fed rate hike signals

NEW YORK/LONDON — Gold prices edged up on Monday from their lowest since mid-March in choppy trade, after nearing technical support and as traders awaited signals from central banks on interest rate hikes.

Bullion is highly sensitive to rising rates because they push up bond yields, increasing the opportunity cost of holding nonyielding gold. They also tend to boost the dollar, in which gold is priced.

Traders were looking ahead to Wednesday and Thursday, when US Federal Reserve Chair Janet Yellen will address Congress.

“We’re stalling right after the selling got a little exhausted on Friday,” said Phillip Streible, senior commodities broker for RJO Futures in Chicago. “A lot of people are forward-looking, waiting for Janet Yellen’s testimony later on this week.”

Spot gold, which dropped 2.30% last week, was up 0.07% at $1,213.61 per ounce by 2:32 p.m. EDT (1832 GMT), turning up after hitting $1,204.45, the lowest since March 15.

US gold futures for August delivery settled up $3.50, or 0.29%, at $1,213.20 per ounce.

Traders expected monetary tightening from many central banks.

That rationale was bolstered by better than expected US jobs data and strong German export figures.

These also fueled optimism about the global growth outlook, encouraging investors to ditch gold for riskier assets.

US 10-year bond yields have risen sharply since late June, while gold is down nearly 7% from a high of $1,295.97 a month ago.

Investors have cut back bets, reducing net long positions in COMEX gold in the week to July 3 by more than half to the smallest bullish stance since January.

Gold holdings at the world’s largest bullion-backed exchangetraded fund, SPDR Gold Trust, fell 2% in the week to Friday.

Standard Chartered analysts said investors should buy at about $1,200 because Indian demand, which was dented by a new sales tax, is likely to recover and US interest rates are expected to rise slowly over the next few years.

Technical support for gold was at $1,200 and $1,195, the March low, Scotia Mocatta analysts said in a note.

Among other precious metals, spot silver edged up 0.45% to $15.65 per ounce, after earlier falling to $15.16. Prices are near their lowest since April last year and investors’ bullish stance in the week to July 3 fell to its lowest since December 2015. Platinum was down 0.47% at $899.25 per ounce and palladium was up 0.27% at $ 840.78 per ounce. —