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Home>UPDATE: Gold prices log third straight decline

UPDATE: Gold prices log third straight decline

UPDATE: Gold prices log third straight decline

10/04/2017

By Myra P. Saefong and Mark DeCambre, MarketWatch

Dollar index steadies, bond yields ease back

Gold prices logged a third decline in a row on Tuesday, pressured by record highs in U.S. stock benchmarks, as recent strength in the dollar and Treasury yields lured some investors away from the precious metal.

December gold on Comex fell $1.20 , or less than 0.1%, to settle at $1,274.60 an ounce, settling at the lowest level since Aug. 8 for a second straight session.

U.S. government bond yields got a boost off increased expectations that Federal Reserve Chairwoman Janet Yellen and fellow policy makers are inclined to lift interest rates once more before the end of 2017. The 2-year Treasury yield note , the most sensitive to shifting interest-rate expectations, hit a 52-week high (http://www.marketwatch.com/story/treasury-yields-see-muted-action-after-better-than-expected-manufacturing-data-2017-10-02) on Monday, but it has pulled back to trade more recently at 1.463% Tuesday.

Higher bond yields, which move inversely to prices, can make owning gold, which doesn't offer interest, less appealing. The exchange-traded SPDR Gold Shares ETF (GLD), meanwhile, traded up 0.1%.

Mihir Kapadia, CEO of Sun Global Investments, said gold is being pressured by strength in the greenback (http://www.marketwatch.com/story/dollar-holds-ground-at-six-week-highs-2017-10-03), and a downturn in physical buying. The dollar, as measured by the U.S. ICE Dollar Index , which gauges the currency against a half-dozen rivals, was almost flat on the day but gained about 1% last week. Dollar strength tends to make buying bullion, which is priced in dollars, less attractive to investors using weaker currencies.

"With the chatter over [President Donald] Trump's choice for Fed chair starting to dominate, gold really is all about the greenback right now," said Adrian Ash, head of research at BullionVault.

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