Prices of gold futures extended losses into a second day on Thursday in Asia, falling almost 1% as higher yields on bonds dented its investment attractiveness, while uncertainty about the timing of a US Fed rate hike also weighed on precious metal.
Overnight comments by Fed Chair Janet Yellen overhanging the commodity as investors tried to estimate what it might mean for the timing of a rate hike expected this year.
Spot gold fell 0.7 per cent to $1,183.18 an ounce, holding below the key $1,200 level for a fifth day. While, on the comex gold futures for June delivery dropped $8.80 to$1,181.40 an ounce.
Overnight, US gold futures dropped mildly in the United States on Wednesday, ending a two-day rally, as disappointing outlooks from US jobs painted a bleak forecast for Friday’s critical nonfarm payroll employment report.
Gold has been operating in a comparatively narrow trading range $ 80 an ounce between $ 1.142 and $ 1.224 from mid February, compared with a range of around $ 150 in January.
Government bond yields in Europe and the United States have heightened fears of deflation ease the recovery of oil prices and in forecast of an interest rate hike by the US Federal Reserve later this year.
Since gold does not pay interest, rising bond yields in the US and other markets is seen as detrimental to the metal.
Investors focusing on NFP on the United States on Friday to April in the search for a better picture of the economy.
Strong data could lead the Fed to raise rates soon, a measure that could affect demand for gold without interest paid.
At Multi Commodity Exchange, gold futures delivery in August fell Rs 35, or 0.13%, to trade at Rs 27,100 per 10 grams.
Analysts said participants started reducing exposures, largely in tandem with the global trend before monthly US employment data put pressure on gold prices.
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