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by 3 minutes Read* On Thursday, investors will get the results of the ECB’s strategy review. Benchmark Yields in the United States have dropped to a four-month low (Recasts, adds detail, updates prices) Reuters, July 8 – On Thursday, gold prices reversed course to trade higher as the US dollar weakened and rates continued to fall, making non-yielding bullion more tempting to investors. By 0914 GMT, spot gold had risen 0.4 percent to $1,811.10 an ounce. Gold futures in the United States were up 0.7 percent at $1,814.70. “The general outlook for gold is upwards… and the dollar is the one market impediment that keeps gold from rising and pulls it down. The metal is up again, thanks to the weakening of the dollar “Carsten Fritsch, a Commerzbank analyst, expressed his opinion. The dollar index, which compares the US currency to six other major currencies, fell 0.1 percent. For holders of foreign currencies, a weakened dollar makes gold more affordable. Meanwhile, 10-year Treasury yields in the United States were trading at a four-month low. The minutes from the US Federal Reserve’s most recent monetary policy meeting, according to Commerzbank’s Fritsch, include no “new surprises,” but the large reduction in bond yields is price-positive for gold. “Various participants” believed requirements for tapering the central bank’s asset purchases would be “met somewhat earlier than they had anticipated,” according to the minutes from the Fed’s June 15-16 meeting. Gold is quite sensitive to rising interest rates in the United States, which raises the opportunity cost of owning metal. “As a result of tighter US monetary policy, the US dollar might also flip from a tailwind to a headwind for bullion prices,” Citi analysts wrote in a report. In Citi’s base-case projection, gold’s bounce in the second quarter was only temporary, and markets will fail to revert above $2,000 an ounce, they said, adding that purchasing sentiment is typically weak. The European Central Bank, which will disclose the results of an 18-month strategic review and revising its inflation target on Thursday, is also attracting attention. Silver was unchanged at $26.12 an ounce, platinum was down 0.9 percent at $1,075.30, and palladium was down 0.8 percent at $2,827.80. (Bengaluru-based reporter Arundhati Sarkar contributed to this report.) David Goodman edited the piece.)/nRead More

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