Gold Shines as Dollar Declines And Bond Yields Rise

Gold prices rose on Thursday as the dollar fell after the Federal Reserve raised interest rates, which makes the precious metal less expensive for holders of other currencies, but the rise in Treasury yields limited the gains.

And spot gold contracts rose 0.4 percent to $ 1936.26 an ounce, after touching the lowest level since February 28 at $ 1894.70 on Wednesday. US gold futures rose 1.3 percent to $1,934.20.

The dollar index fell, which makes gold cheaper for holders of other currencies after the Federal Reserve decided to raise interest rates in a shift from dealing with the repercussions of the Corona pandemic to combating the economic risks of inflation and the war in Ukraine.

The Federal Reserve’s decision raised US 10-year Treasury yields, the highest level since May 2019, in the previous session.

Gold priced in the US currency is very sensitive to rising interest rates in the United States, as this increases the cost of holding bullion that does not yield a return.

The price of palladium, which is used in the automobile industry, rose 2.4 percent to $2,465.52 an ounce.

The metal hit a record $3,440.76 an ounce on March 7, boosted by concerns about supply disruptions from Russia, the main palladium producer.

Silver rose 0.6 percent to $25.22 an ounce, while platinum fell 0.1 percent to $1016.44.