Gold futures ticked higher early Tuesday, aiming for a fourth straight gain, as the U.S. dollar continued to edge back from recent highs.
Gold for June delivery
Gold, which bounced after hitting a three-month low in early May, has benefited as the 10-year Treasury yield pulled back from 3 1/2-year high above 3.2% in recent weeks as a selloff in equities spurred demand for safe-haven assets.
The dollar, as measured by the ICE U.S. Dollar Index
meanwhile, has retreated from a roughly 20-year high.
Gold ”is benefiting from the drop in Treasury yields together with some dollar weakness —- with which it has an inverted price correlation. The stabilization of Treasury yields and the dollar, which have retreated from peaks reached in mid-May, occurs as the markets appear to have priced-in the Fed’s hawkish tilt, and the appearance of some rays of hope for a brighter global economic outlook,” said Ricardo Evangelista, senior analyst at ActivTrades, in a note.
The expected easing of Covid lockdowns across China and a surprising statement from President Biden, hinting at a potential reduction of tariffs applied to Chinese imports on Monday, lifted the mood in the markets and created scope for further gold gains, as dollar demand decreases, he said.
In other metals trading, July copper
fell 1.6% to $4.275 a pound.