Gold fell for first time this week as Federal
Reserve Chair Janet Yellen said bond yields “could see a sharp jump”
after the central bank raises interest rates, crimping demand for the
metal as an alternate investment.
Gold declined in the past two months as speculation
mounted that the Fed’s benchmark rate would increase. Treasury yields
have been held down by the three rounds of large-scale asset purchases
that have swelled the central bank’s balance sheet by $4.47 trillion.
Higher borrowing costs cut gold’s allure because
the metal generally offers returns only through prices gains, sending
investors to assets with better yield prospects such as bonds. Traders
are parsing economic data to assess the outlook for the timing of a rate
increase. The government on May 8 releases statistics on jobs.
Gold futures for June delivery fell 0.2 percent to
settle at $1,190.30 an ounce at 1:46 p.m. on the Comex in New York.
Aggregate trading was 24 percent below the 100-day average, data
compiled by Bloomberg show. The price rose 1.6 percent in the past two
days.
Source: Bloomberg
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