Gold Slightly Higher on USD Weakness Awaits Retail Sales

Gold futures traded modestly higher Tuesday as the U.S. dollar lost ground and as government bonds in the U.S. and Europe tumbled, spurring a modicum of safe-haven demand.

Gold for June delivery on Comex GCM5, +0.62%  rose $10, or 0.8%, to $1,193 an ounce, while July silver SIN5, +0.40%  advanced 10.1 cents, or 0.6%, to $16.415 an ounce.

European government bond prices continued to retreat, pushing up yields, with U.S. Treasurys following suit. The yield on the 10-year Treasury TMUBMUSD10Y, +0.40%  traded above 2.33%, its highest level since November.

Rising bonds yields are typically negative for gold, with commodities that produce no yield suffering by comparison.

But the bond market selloff has spilled over to cause weakness in world stock markets, wrote Jim Wyckoff, analyst at Kitco Metals.

Indeed, stock-index futures traded lower, with the Dow industrials on track to open with a triple-digit loss.

via MarketWatch

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza