Bengaluru — Gold ticked higher on Tuesday as Asian stocks slipped on political ferment in Washington and a global surge in coronavirus cases, though a firmer dollar and higher US Treasury yields limited gains.
US gold futures eased 0.2% to $1,847.30. Asian stocks mostly traded lower as Democrats in the US House of Representatives barrelled towards impeaching US President Donald Trump in the wake of the Capitol siege last week. Benchmark 10-year Treasury yields held firm at 10-month highs as investors adjusted for higher government spending, helping the dollar firm and making gold expensive. Higher bond yields increase the opportunity cost of holding the non-interest yielding gold.
“Gold looks underpriced at current levels. The new strain reminds us that 2021 may not be materially different from 2020 if the world doesn’t get the vaccine fast enough,” said Howie Lee, an economist at OCBC Bank.