Gold Slips from 2-Month Peak, Palladium Holds Near Record High

Benchmark 10-year U.S. Treasury yield was pinned below 1.6%, reducing the opportunity cost of holding non-yielding bullion. The dollar held near multi-week lows. “There is slightly weaker physical demand (for gold) at these higher prices,” said Nicholas Frappell, global general manager at ABC Bullion

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LONDON- Gold eased from a two-month high on Thursday as investors awaited European Central Bank chief Christine Lagarde’s conference, while supply worries kept palladium near a record peak hit in the previous session.Spot gold was down 0.3% at $1,787.34 per ounce, after hitting its highest since Feb. 25 at $1,797.67.

U.S. gold futures were down 0.3% at $1,787.30. “We will see another shot at $1,800 as the sentiment has improved. We have not seen any further exchange traded fund outflows,” Commerzbank analyst Carsten Fritsch said.

“There’s also a perception that central banks are not going to do anything in changing the ultra-loose monetary policy, the effect of that is rising gold prices,” he added.

Benchmark 10-year U.S. Treasury yield was pinned below 1.6%, reducing the opportunity cost of holding non-yielding bullion. The dollar held near multi-week lows. “There is slightly weaker physical demand (for gold) at these higher prices,” said Nicholas Frappell, global general manager at ABC Bullion.

Meanwhile, palladium eased 0.7% to $2,855.93 an ounce, having surged to an all-time high of $2,891.20 per ounce on Wednesday. Many analysts expect a further run towards $3,000.

Higher palladium prices reflect the tight supply situation, Commerzbank’s Fritsch said, adding the market is set to show a sizeable supply deficit this year partly on account of the robust demand from the automotive industry.

Silver fell 0.7% to $26.38 per ounce and platinum was down 0.8% at $1,204.16.

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