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Title: Gold Up, Dollar and U.S. Yields Also Resume Climb

May 17, 2022 12:39AM ET

By: AnalysisWatch

Gold prices gained in Asia Tuesday morning, despite the dollar's slowly rebounding and U.S. government bond yields rising again.

Gold futures rose 0.48% to $1,882.65 an ounce by 12:36 AM ET. The dollar, which usually moves inversely to gold, rose slightly Tuesday after falling from a 20-year high on Monday.

The Chinese yuan, which has been on a downward trend lately, found a bottom as investors reduced bets on whether the U.S. interest rate hike would bring further gains to the greenback. Yields on 10-year U.S. Treasury bonds also rose.

"Now that we have the much-needed shakeout in the gilt markets, holders of longer-dated paper may be positioning themselves for the possible turn south in tough U.S. economic data," Stephen Innes, managing partner at SPI Asset Management, told Reuters.

Asian stocks were mostly higher on Tuesday, and the Reserve Bank of Australia released the minutes of its latest meeting in the morning. The G-7 finance ministers and central bankers meet a day later.

Investors also expect speeches from Fed Chairman Jerome Powell and other Fed policymakers later in the day, and Philadelphia Fed President Patrick Harker speaks a day later.

In other precious metals, silver slipped 0.2%, platinum was unchanged at $945.76, and palladium fell 1.2%.

"With China about to reopen and likely to take further stimulus measures, all commodities are benefiting." And palladium is ultimately used in industrial applications, particularly in the automotive sector; that segment could benefit from the reopening of ports in China, Innes said.

Rising demand and lower supply will also help palladium and rhodium return to deficits in 2022 and reduce platinum's surplus, consultancy Metals Focus said Monday.

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