Gold prices crept higher Thursday morning, attempting to bounce back from its lowest finish in five weeks a day earlier as the dollar weakened slightly.
A marginally weaker dollar early Thursday, including against the euro, can give gold some relief, particularly as the benchmark 10-year Treasury yield pulls back from a psychologically significant level at 3%. The pullback for yields, which can help bolster appetite for gold, comes as the European Central Bank, held its policy mix unchanged, as expected.
June gold GCM8, +0.12% added $3.10, or 0.3%, to $1,326.10 an ounce. It wrapped up trading Wednesday at $1,322.80, the lowest for a most-active contract since March 21, FactSet data showed.
Concerns over rapidly rising U.S. interest rates were still hanging over markets, as the yield on 10-year Treasury notes TMUBMUSD10Y, -1.21% already trading at its highest since January 2014, stayed above the psychologically important 3% level early Thursday.
It is also true that accelerating inflation, expectations for which can be a driver of higher Treasury yields, can eventually lure investors into the shelter of gold. That means bond market moves tend to have mixed implications for the metal. So far, however, rising yields have driven gold lower.
Read: Here’s why the stock market and commodities are no longer in lockstep
The ICE U.S. Dollar Index DXY, -0.19% was 0.2% at 91.00. Its moves impact the appeal of dollar-priced commodities, including the yellow metal, to investors using other currencies.
The dollar remained ticked lower after the ECB repeated its promise to keep buying bonds until the end of September, or beyond, if necessary.
On the U.S. data front, U.S. durable goods orders jumped in March on plane orders, while weekly jobless benefits requests were again at their lowest in decades. Against this mostly upbeat data backdrop, financial markets have priced in a more aggressive course for U.S. interest rates this year than the current three hikes—two more after a March move—that the Fed itself has flagged.
Trade uncertainty also hangs over markets and that uncertainty could prove supportive of haven gold. Germany said it expects that tariffs on steel and aluminum imported from the European Union to the U.S. will begin on May 1, according to reports Thursday.
Some attention was focused on the prospect of the U.S. reimposing sanctions on Iran, despite French President Emmanuel Macron’s efforts at brokering a new deal between Washington and Iran. But investors remain circumspect about the possibility of fresh sanctions, analysts say.
Elsewhere in the metals market, May silver SIK8, +0.11% rose 4 cents, or 0.2%, to $16.535 an ounce.
Read: Global economic growth was a blessing and curse for 2017 silver demand
May copper HGK8, -0.38% lagged behind the behind broader metals market move as it fell 0.8% to $3.111 a pound, while July platinum PLN8, +0.30% was nearly unchanged at $912.50 an ounce.
June palladium PAM8, +1.34% rose 0.1% to $968.30 an ounce. The contract still trades up over 2% month to date despite pulling back sharply in recent sessions. U.S. tensions with Russia, which threaten global supplies, have recently fueled strong weekly gains.
The SPDR Gold Shares GLD, -0.14% exchange-traded fund rose 0.2% and the iShares Silver Trust SLV, -0.26% fell 0.2%. The VanEck Vectors Gold Miners GDX, +0.20% rose 0.2%.