GOLD UP, SILVER, PLATINUM FALL

GOLD EDGED up in choppy trading yesterday as a buoyant dollar was offset by Treasury yields slumping to their lowest since February.

Spot gold price rose 0.2 percent to $1 815.16 (about R26 135) an ounce in afternoon trade. US gold futures fell 0.1 percent to $1 812.70 an ounce.

“Gold is caught in a tug-of-war between a rising dollar that weighs down on the precious metal and a drop in risk appetite, which supports it’s price,” said Ricardo Evangelista, a senior analyst at ActivTrades.

A stronger dollar, which hit a more than three-month high, drove gold to a one-week trough earlier in the session, but a sharp fall in US benchmark Treasury yields helped gold pare its early losses.

Sentiment in riskier markets was bruised by investors’ fears over a relentless surge in coronavirus cases, which forced many Asian countries into imposing lockdowns, and growing inflationary pressures.

“Stagflation could become a really interesting element if we keep seeing slowing economic growth coupled with some inflationary fears,” said Jim Wyckoff, analyst with Kitco Metals.

“Theoretically, stagflation should be bullish for gold because you’ve got rising inflation, which suggests investors are going to look at hard assets including gold and slowing economic growth which might put in a safe-haven bid.”

Focus is now likely to turn to next week’s US Federal Reserve and European Central Bank meetings.

“(Gold) investors are also pricing in the expectation that recent spikes in inflation will force the hand of the Fed, driving a higher likelihood of earlier than previously expected rate hikes and tapering of the asset purchase program,” ActivTrades’ Evangelista said.

Silver fell 1.4 percent to $25.31 an ounce, platinum dropped 1.4 percent to $1 086.84 and palladium was down 0.7 percent at $2 612.48.