Gold near 7-week low as yields climb, inflation worries persist

Gold near 7-week low as yields climb, inflation worries persist

Gold traded near the lowest in almost seven weeks as bond yields rose and the dollar strengthened, with concerns about inflation rippling through markets. The benchmark 10-year US yield rose to the highest since June on Tuesday, damping the appeal of non-interest bearing bullion, while a gauge of the greenback was near the highest since November. During a Senate Banking Committee hearing, both Treasury Secretary Janet Yellen and Fed Chair Jerome Powell maintained that the current high level of inflation in the US is due to temporary supply-chain disruptions and should be expected to dissipate when those issues are resolved. Still, Fed Bank of St. Louis president James Bullard said he sees “upside risks” to inflation and the central bank should be prepared in case price pressures persist for longer than expected. Earlier this week, Fed Governor Lael Brainard said the labour market may soon meet her yardstick for scaling back asset purchases, while the Covid-19 delta variant could raise upside risks for inflation as supply constraints last longer. Gold is heading for its biggest monthly loss since June as more central banks start signaling a pullback in stimulus measures used to cushion the economic impact of the pandemic. Last