Gold Down as US 30-Year TIPS Auction High Yield Rises
Gold price was down Friday as the United States (US) 30-year Treasury Inflation-Protected Securities, TIPS, auction hit a high yield of 0.195%, up from the -0.292% high in the previous auction.
The bid to cover ratio for the auction was 2.17, below the 2.34 ratio in the previous auction, according to market data. Dealers represented 61% of the bids, with direct bidders at 6.84% and indirect bidders at 32.16%.
For takedown, dealers took 20.26%, with direct bidders at 9.86% and indirects were awarded 69.88%. Read: U.S 30-Year Auction High Yield Declines, Demand Lower
Gold Edges Down from an Eight-Month High as Safe-Haven Buying Continues.
Gold edged down early on Friday but remained above the US$1,900 mark as investors move to safe-haven assets amid rising tensions with Russia. Gold for April delivery was last seen down US$1.00 to US$1,901.00 per ounce.
The price of the metal surged to the highest in eight months as US Secretary of State Antony Blinken appeared before the United Nations Security Council to warn Russia is seeking to manufacture a pretext to begin its invasion of Ukraine.
The US and its allies have warned of severe sanctions should Russia begin an attack on its neighbour. The threat of the first major land war in Europe since World War Two has investors looking to shed risk, moving to the perceived safety of gold and other safe-haven assets.
“It is quite clear to us that gold is trading higher amid a widespread risk-off tone. We are seeing inflows into gold-backed ETFs as a potential Russian invasion of Ukraine has taken on more mindshare.
“Gold has benefitted in both price and flow terms, with it largely moving alongside other perceived safe havens as risk assets have lost some lustre as US and NATO officials continue to underscore the risks of a conflict,” RBC Capital Markets commodity analyst said in a note.
The US dollar rose, making gold more expensive for international buyers, with the ICE dollar index last seen up 0.12 points to 95.92. Bond yields tightened, bullish for gold since it offers no yield, with the US 10-year note last seen paying 1.942%, down 2.2 basis points.
