Gold futures added to gains early Tuesday and headed for its most bullish stretch since February as yields for U.S. benchmark bonds retreated and a rally in stocks looked set to take a slight breather.
The most-active June gold
contract on Comex was gaining $6.90, or 0.4%, to trade at $1,735.70 an ounce, following a less than 0.1% gain Monday. Gold prices are on track for a fourth straight gain, which would match its longest string of advances since a similar stretch ended Feb. 10, FactSet data show.
Some dealers attributed bullion’s recent run to a pullback in yields, with the 10-year Treasury note
at around 1.69%. Meanwhile, the Dow Jones Industrial Average
and the S&P 500 index
were set to edge lower after concluding Monday’s post-Easter trade at records.
One analyst said that gold has been gathering some upward momentum as an climb for the U.S. dollar has seemingly abated.
“Gold is consolidating above $1,730 as the greenback is slowing down,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades in a daily note. “We are in a phase where gold remains inversely correlated with US yields and the US dollar where any movement of these two assets is generating the opposite reaction on bullion,” he said.
Still, the U.S. dollar on Tuesday morning was gaining less than 0.1% to 92.669, as measured by the ICE U.S. Dollar Index
Strength in the dollar can make assets priced in the currency comparatively more expensive to overseas buyers of the commodity and rising bond yields can undercut demand for precious metals, which don’t offer a coupon.