November 10, 2017 / 11:41 AM / a year ago

PRECIOUS-Gold falls on bond yields, U.S. tax doubts limit losses

    * Global stocks end longest winning streak since 2003
    * U.S. bond yields rise
    * Gold still on track for weekly rise

 (Recasts, updates prices, adds comment, changes dateline)
    By Renita D. Young and Peter Hobson
    NEW YORK/LONDON, Nov 10 (Reuters) - Gold prices turned lower
on Friday as U.S. Treasury bond yields rose, but losses were
limited by weaker stock markets and the dollar, which fell due
to uncertainty over U.S. tax reform.
    A rise in U.S. bond yields pressures gold by reducing the
attractiveness of non-yielding bullion, while a weaker dollar
makes bullion cheaper for holders of other currencies. 
    "A higher yield tends to increase the cost to carry gold,
and we had a little uptick in the yield curve slope," said Bart
Melek, head of commodity strategy at TD Securities in Toronto.
    Two-year yields were at a nine-year high as traders closed
out curve-flattener positions and dealers reduced their holdings
of longer-date debt following this weeks auctions.      
    Spot gold        was down 0.7 percent at $1,275.60 an ounce
by 1:55 p.m. EST (1855 GMT). It touched $1,288.34 on Thursday,
its highest since Oct. 20 and was on track for a 0.5 percent
weekly rise.
    U.S. gold futures         for December delivery settled down
$13.30, or 1 percent, at $1,274.20 per ounce, a 0.4 percent
weekly rise.
    The dollar was set for its first weekly fall in a month as
disappointment that a landmark U.S. tax overhaul may be delayed
until 2019 put a brake on the currency's recent rally.
    Uncertainty over the tax plans also hit U.S. stock markets
and helped end the longest run of global share price gains since
2003. Expectations of lower taxes, one of President Donald
Trump's key promises, have helped power the S&P more than 20
percent since the 2016 presidential election.            
    Political or economic uncertainty often prompts investors to
buy gold to protect their assets from declining yields, since
gold is a non-yielding commodity.
    Further share price falls would likely increase the price of
gold, said Saxo Bank analyst Ole Hansen.
    In other precious metals, silver        was down 0.6 percent
at $16.89 per ounce, yet on track for a 0.4 percent gain this
week, its first weekly rise in four weeks.
    Platinum        was down 0.8 percent at $929.40 an ounce
after hitting $941.40, the highest since Oct. 16. It was set for
a weekly gain of 1.2 percent.
    Palladium        was down 1.6 percent at $994.22 an ounce
after touching its highest since 2001 at $1,026.10 on Thursday
and was down 0.3 percent for the week.

 (Additional reporting by Vijaykumar Vedala and Arpan Varghese
in BENGALURU; Editing by Elaine Hardcastle and Susan Thomas)
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below