(Aug 19): Gold rose as a selloff in US bonds eased, relieving pressure on the precious metal after it fell the most in almost a month on Tuesday. 

Bullion climbed as much as 0.6% to trade above US$4,360 (RM17,712) an ounce, after shedding almost 2% in the previous session. Treasuries steadied following a plunge that sent yields on 30-year notes to the highest in almost two decades on Tuesday. Higher borrowing costs are typically negative for gold, which doesn’t pay interest.

Gold has recovered in recent weeks to trade around US$4,400 an ounce, supported by renewed investor demand and central-bank buying, notably from China. A fund manager survey by Bank of America Corp on Tuesday showed gold hit the highest level since March 2023. 

The dimming prospects for a peace deal between the US and Iran may keep a lid on further gains, however. US President Donald Trump insisted on Tuesday that there were no talks ongoing with Tehran, leaving control of the Strait of Hormuz in limbo. The memorandum of understanding the two countries signed in June has expired with no plan to extend it, buoying oil prices. Energy-led inflation puts pressure on the Federal Reserve to raise interest rates, a headwind for bullion.

While there may not be “renewed selling pressure, the recent surge in flows into precious metals appears to be easing,” Ryan McKay, an analyst from TD Securities, wrote in a note.

The next clues on the Fed’s rate path will come later Wednesday with the release of the minutes from its July policy meeting, followed by chairman Kevin Warsh’s speech to the Fed’s annual Jackson Hole symposium next week.

Spot gold was 0.5% higher at US$4,357.07 an ounce at 11.34 am in Singapore. Silver fell 0.6% to US$62.99 an ounce. Platinum and palladium edged higher. The Bloomberg Dollar Spot Index, a gauge of the US currency, declined 0.1%. 

Uploaded by Evelyn Chan