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Title: Gold Down, but Pulls Up from Three-Month Low, as U.S. Yields Fall

May 16, 2022 01:18AM ET

By: AnalysisWatch

Gold prices were down in Asia Monday morning after hitting a more than three-month low in the previous session. Lower U.S. Treasury yields kept demand for gold above the $1,800 level.

Gold futures were down 0.07% at $1,807.01 by 1:13 AM ET.

"Since $1,800 is such a big round number, it's only natural that it provides some level of support as some traders try to be bold and buy a dip while others close profitable short positions," Matt Simpson, senior market analyst at City Index, told Reuters.

The yellow metal fell more than 1% on Friday to its lowest since Feb. 4 at $1,798.86 and closed at $1,811.15.

But things don't look good for gold investors right now. Even if we see a rally from $1,800, the momentum is clearly in favor of a continued downtrend, "Simpson said.

The dollar, which normally moves inversely to gold prices, weakened slightly Monday but was just below a 20-year high. Concerns about economic growth prompt investors to turn to the greenback as a safe haven.

Cleveland Fed President Loretta Mester said Friday that yields on 10-year U.S. Treasury bonds fell, and inflation will have to move lower for "several more months" before Fed officials can safely assume it has peaked, she said. Mester added she is prepared to consider faster rate hikes by the Fed's September 2022 meeting if the data doesn't improve by then.

Investors are also waiting for the minutes of the Reserve Bank of Australia's latest meeting, which will be released on Tuesday.

In other precious metals, silver slipped 0.1%, palladium rose 0.3%, and platinum was unchanged at $938.46.

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