Gold futures were trading modestly lower Tuesday morning as yields for government debt rose and the U.S. dollar picked up some strength.
April gold GC00, -0.17% GCJ22, -0.17% was $2.80, or 0.2%, lower to reach $1,819 an ounce, following a 0.8% gain a day ago, which marked the precious metal’s biggest one-day gain for a most-active contract since Jan. 19 and highest settlement since Jan. 26, FactSet data show.
The yield on the 10-year Treasury note TMUBMUSD10Y, 1.943% edged up to 1.94%, to around highs not seen since 2020, and the dollar was up 0.1%, as gauged by the ICE U.S. Dollar Index DXY, +0.15%, a measure of greenback against a half-dozen rival currencies.
Higher yields and a stronger dollar can undermine interest in dollar-pegged bullion, which doesn’t offer a coupon.
Analysts said that some easing of tensions in Western Europe, where Russia has been threatening to invade Ukraine, and profit-taking from a recent run-up in gold’s value has been weighing on prices.
“Gold prices were down too, though only marginally,” wrote Raffi Boyadjian, lead investment analyst at brokerage XM.com, in a research note.
“The increased diplomatic effort in recent days to de-escalate tensions on the Ukrainian border appears to have brought geopolitical risks back to the fore, making some investors nervous and boosting the yellow metal’s safe haven appeal,” the analyst wrote.
Meanwhile, March silver SIH22, -0.94% was trading 21 cents, or 0.9%, lower at $22.87 an ounce, after rising 2.7% on Monday.