Gold recovers after worst sell-off in six weeks

Gold inched up on Tuesday, after a spike in U.S. bond yields spurred by bets of earlier-than-expected interest rate hikes by the Federal Reserve led to bullion’s worst sell-off in six weeks in the previous session.

Spot gold was up 0.2% at $1,804.04 per ounce by 0628 GMT, after prices hit a more than one-month high of $1,831.62 on Monday, before reversing course to close 1.5% lower. U.S. gold futures were up 0.3% at $1,804.70.

“When you have this kind of a rise in yields that undermines the appeal of an anti-inflation hedge … (it’s) really not surprising to see gold start weaker,” DailyFX currency strategist Ilya Spivak said.

Towards 2021-end, interest rate expectations were rising, but inflation worries were building up even faster, so real interest rates were kept anchored and that gave gold some appeal as a store of inflation-adjusted value, Spivak added.

Spot gold may stabilise around a support at $1,801 per ounce and test a resistance at $1,815, according to Reuters technical analyst Wang Tao.

Spot silver fell 0.5% to $22.74 an ounce, platinum shed 0.3% to $952.28 and palladium gained 0.8% to $1,839.86.