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Gold rises as US bond yields fall

Gold rose on Thursday, building on a six-day winning streak as the US dollar fell and Treasury yields extended to their lowest in more than four months.
The price of spot gold rose 0.6% to $ 1,800, and US gold futures rose 0.7 percent to $ 1814.30.
The dollar index fell 0.1%, making gold cheaper for other currency holders. The benchmark 10-year US Treasury yields also declined, lowering the opportunity cost of holding non-yielding bullion.
The outlook for gold is bullish, and the only obstacle in the market preventing gold from rising and dragging it down is the dollar, Commerzbank analyst Carsten Fritsch said that with the dollar weakening somewhat, the metal rose again, and he said there was no new surprise in the minutes of the meeting. The recent monetary policy of the US Federal Reserve, adding that the decline in bond yields was positive for the price of gold.
The minutes of the Fed’s June 15-16 meeting said that various participants felt that conditions to reduce central bank asset purchases would be met somewhat earlier than they expected.
Gold is very sensitive to rising US interest rates, which increases the opportunity cost of holding bullion.
Bank of America Global Research said in a note: While higher inflation should bring new buyers into the gold market, tighter monetary policy is set to keep the metal within its recent ranges, and forecast that gold will average $1,828 this year.
Market participants also assessed the European Central Bank’s positioning of a new inflation target on Thursday after an 18-month strategic review.
Elsewhere, platinum fell 1.2% to $2,817.66, and palladium fell 1.2% to $1,071.52.
Bank of America expects higher demand for platinum, citing the increasing substitution of the role of palladium and platinum in the hydrogen economy. The bank added: “We see further rise from here, especially when the recent turmoil in the auto industry subsides, and silver changed little at $ 26.11 an ounce.”

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