Gold prices steadied early on Thursday, remaining rangebound amid concerns high oil prices will push up inflation and force hikes to interest rates.
Gold for June delivery was last seen down US$6.20 to US$4,746.80 per ounce.
Gold has traded within a US$200 range since the start of the month despite the geopolitical turmoil that followed the Feb.28 start to the war on Iran. While the metal has a reputation as a store of value in turbulent times, traders have instead turned to bonds and the dollar to fend off the threat of higher interest rates as surging oil prices push inflation higher, keeping the metal rangebound.
"After a deep decline in March, April has been about stabilization for gold. While we get the sense that investors remain tactical, the tone of our conversations has been one of optimism. The all-time highs looked to many in the institutional space as overstretched, speculative, and perhaps overleveraged. After the decline and weakness last month, the view is that gold is closer to its fundamentals (i.e., macro-drivers plus uncertainty) than previously," Christopher Louney, a gold and natural gas strategist at RBC Capital Markets, wrote.
The dollar edged higher early, with the ICE dollar index last seen up 0.09 points to 98.68. Treasury yields were little changed, with the yield on the U.S. two-year note last seen at 3.813%, up 0.7 basis points, while the 10-year note was unchanged at 4.307%.