(Resend, price updates)
* Investors are waiting for the central bank’s policy meetings
* US 10-year Treasury yields fell below 1.6%
* Palladium decreases by more than 2%
(Reuters) – Gold prices rose in swing trading on Wednesday, supported by lower US bond yields and a weaker dollar, although strong risk appetite in equity markets kept bullion gains in check.
Spot gold was up 0.2% at $1,796.55 an ounce by 01:47 PM ET (1747 GMT), after dropping 0.6% earlier in the session. US gold futures settled 0.3% higher at $1,798.80 an ounce.
“We are in a period of gold consolidation, but I think eventual policy tightening and inflation concerns should be positive for the metal,” said Edward Moya, chief market analyst at brokerage OANDA.
“Earnings were rather impressive, and that surprised a lot of people… US tech stocks are a favorite place for many investors to go to, which reduces the demand for a safe haven at the moment.”
The appetite for riskier assets remained strong after strong quarterly reports from Alphabet Inc., which owns Google, and Microsoft Corp., which lifted the Nasdaq.
Helping gold, the dollar index fell 0.2% against its rivals. Yields on the benchmark 10-year US Treasury fell below 1.6% to its lowest level in nearly two weeks, reducing the opportunity cost of holding non-yielding bullion.
Investors are now waiting for Thursday’s European Central Bank meeting and the US Federal Open Market Committee’s policy meeting on November 3rd for more clues about the tapering schedule.
The European Central Bank is expected to keep policy unchanged and leave a decision on the pandemic emergency bond purchase program until December.
While gold is often considered an inflation hedge, lower economic stimulus and higher interest rates are driving government bond yields higher, raising the opportunity cost of holding bullion.
Elsewhere, silver slipped 0.1% to $24.10 an ounce.
StoneX analyst Rona O’Connell said interest in silver is growing in the professional market and this bodes well for gold.
Platinum fell 1.4% to $1013.50 an ounce. And palladium fell 2.6 percent to 1959.17 dollars. (Reporting by Amy Karen Daniel and Brijesh Patel in Bengaluru; Editing by Ramakrishnan M.)