Gold futures headed slightly higher Wednesday, attempting to notch a third straight gain and add to its climb above $1,800, amid weakness in the U.S. dollar and a further retreat in yields for government debt.
Bullion has been buoyant so far in 2022 but the precious metal remains caught in a relatively tight range with $1.850 serving as an area of resistance, against the prospective of the Federal Reserve launching a regime of higher interest rates.
“Gold’s resilience in 2022 has three possible explanations, in our view—elevated demand for portfolio hedges, a belief the Fed either stays behind the curve, or it overtightens, and growth falters,” wrote strategists at UBS Global Wealth Management.
April gold
GCJ22,
GC00,
rose $3.50, or 02%, to trade at $1,805 an ounce, following a 0.3% advance on Tuesday, which marked its highest for a most-active contract since Jan. 26, FactSet data show.
“Gold continues to be pulled back and forth because of the ebb and flow of the US bond market, as well as the strength of the US dollar. Today’s weakness in the currency markets appears to be helping to support gold, pushing it back above the $1,800 level,” wrote Michael Hewson, chief market analyst at CMC Markets UK, in a daily note.
The 10-year Treasury note
TMUBMUSD10Y,
yields 1.78%, down by about 2 basis points from its levels afternoon, while the dollar was down 0.5%, as gauged by the ICE U.S. Dollar Index
DXY,
a gauge of the buck against a half-dozen other currencies.
Meanwhile, silver for March delivery
SIH22,
SI00,
was trading 25 cents, or 1.1%, higher at $22.84 an ounce, after rising 0.9% a day ago.
This post was originally published on Market Watch
