Gold prices drop at settlement as US bond yields surge

Gold prices edged down at settlement today, May 29, with the US 10-year bond yields jumping to the highest level in almost a month, following the unexpected improvement in US consumer confidence for May.

Bullion for August delivery declined 0.65%, or $15.30, to end at $2,341.20 per ounce, after climbing to $2,363.70 an ounce in early trading.

Meanwhile, the US dollar index, which gauges the greenback's strength against a basket of six currencies, grew 0.45% to 105.06 points at 08:40 pm Makkah time.

“We got a small recovery going in the dollar index. Also, the Fed speakers have recently been quite hawkish. The Treasury yields are continuing to rise. So [there are] just a lot of these headwinds weighing on the market,” said Phillip Streible, chief market strategist at Blue Line Futures, Reuters reported.

Investors are awaiting today’s release of the Federal Reserve's Beige Book, which compiles evidence on economic conditions from the 12 Fed districts. This report is issued two weeks before each Federal Open Market Committee meeting, when used in the decision-making on short-term interest rates.