GOLD STEADY, SILVER DOWN

GOLD PRICES steadied in choppy trade yesterday, as inflation worries and renewed concerns about China’s property sector offset pressure from rising US bond yields.

Spot gold price was little changed at $1 780.10 (about R25 741) an ounce by 4.39pm. US gold futures for December delivery dropped 0.25 percent to $1 780.50 an ounce.

“The Fed is going to taper and yields are going to make an all-time high so there is no reason for people to park their money in a non-yielding safety asset like gold,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

US benchmark 10-year Treasury yields climbed to a five-month peak, while the dollar index held steady against key rivals.

While gold is often considered an inflation hedge, reduced stimulus and interest rate hikes push government bond yields up, raising the opportunity cost of holding non-yielding bullion.

Streible said Evergrande’s shares ending the session 12.5 percent lower is a positive case for gold.

Equity markets across Asia and Europe fell after Evergrande said late on Wednesday that it had scrapped a deal to sell a 50.1 percent stake in its property services arm, and as inflation worries also took a toll on the markets.

UBS analysts said in a note that rising inflation expectations and softening growth expectations could support gold prices in the next month or two.

Two US Federal Reserve officials said on Wednesday that while the central bank should begin winding down its stimulus measures, it was too soon for interest rate hikes.

Among other precious metals, spot silver was down 0.8 percent to $24.07 an ounce and spot Platinum declined 0.5 percent to $1 045.02 an ounce.

Spot Palladium retreated 2.8 percent to $2 013.03 an ounce.