Small gains on gold in the shadow of inflation in the US

Gold rose on Monday as US 10-year bond yields hit a two-year high as investors tried to hedge against inflation and continuing geopolitical risks.

Gold futures for February delivery were up 0.1% at $ 1,798.80 an ounce, closing just under $ 1,800 in third consecutive session.

Intra-conference, of course, gold reached $ 1,802. Gold is hovering around $ 1,800 despite rising yields, indicating that the market is considering other factors such as inflation and geopolitical tensions, said Saxo Bank analyst Ole Hansen.

“The weakening of the stock has also potentially added some support to the precious metals market,” Hansen said, adding that returns would remain in the spotlight this week, along with US CPI inflation data.

The key US CPI is expected to have risen 5.4% year-on-year in December, from 4.9% last month, which could underscore the need for earlier-than-expected rate hikes by the Federal Reserve.

Rising yields weighed on the stock markets on Monday, as investors worried about the prospect of higher interest rates in the US. While yields are likely to move even higher than current levels, most of the initial move has potentially taken place, Hansen said.

Ongoing tensions between the United States and Russia over Ukraine and unrest in Kazakhstan are also raising geopolitical concerns, he added.

Silver was up 0.6% at $ 22.44 an ounce, platinum was up 0.4% at $ 958.51 an ounce and palladium was up 1.2% at $ 1,957.18 an ounce.

UBS expects platinum prices to rise to $ 1,150 an ounce by the end of 2022 and palladium prices to recover to $ 2,000 an ounce: “We have positive outlook for both platinum and palladium as we expect a recovery “Demand with the expected easing of car supply chain constraints, including chip shortages, by 2022,” he said.