INSUBCONTINENT EXCLUSIVE:
Higher yields on bonds make gold a less attractive investment because it pays no interestNew York/London: Gold slumped to a five-week low on
Wednesday as the dollar jumped and US Treasury yields continued to rise on signs of US economic strength and an easing in the US-China trade
conflict.The benchmark US 10-year Treasury yield breached 3 per cent on Tuesday for the first time in more than four years and remained
above that level on Wednesday as jitters about growing federal borrowing spurred selling of US government bonds.Higher yields on bonds make
gold a less attractive investment because it pays no interest."On a technical level, people have been watching it for a long time
Yields have been trending lower for multiple decades really, so some have argued in the marketplace that we are right up on the cusp of a
regime shift," said TD Securities commodities strategist Daniel Ghali.Spot gold was down 0.66 per cent at $1,321.56 per ounce by 1756 GMT
It touched a session low of $1,318.51, the lowest level since March 21.US gold futures for June delivery settled down $10.20, or 0.8 per
cent, at $1,322.80 per ounce.The dollar index rose to a four-month high against a basket of currencies.World stocks were down for a fifth
China and that officials from both sides would sit down for negotiations in a few days."There is a bit more confidence in the US and that
negatively affects gold," said Natixis precious metals analyst Bernard Dahdah.Gold is often seen as a store of value during times of
political and financial uncertainty."As traders put geopolitical and trade risk in the rear-view mirror for the time being, how the dollar
flourishes and wilts will be the primary driver of near-term gold sentiment," said Stephen Innes, APAC trading head at OANDA.But investor
appetite climbed as gold-backed exchange-traded funds (ETFs) holdings rose to the highest level since 2013."As the Goldilocks market
environment draws to a close, investor interest in gold has picked up," TS Lombard said in a note, referring to an economy that is not so
hot that it causes inflation, and not so cold that it causes a recession.Meanwhile, spot silver dropped 0.9 per cent to $16.56 an ounce
after touching $16.49, near a two-week low
Platinum lost 1.7 per cent to $910.20 an ounce after earlier hitting $903.50, near a three-week low.Palladium fell 0.22 per cent to $972.4
