April 21 (Reuters) – Gold extended losses during U.S. trading hours on Tuesday as a stronger dollar and rising yields weighed on prices, while investors awaited the outcome of tentative U.S.-Iran talks and Fed chair nominee Kevin Warsh’s confirmation hearing.
Spot gold fell 2% to $4,724.31 per ounce at 12:28 p.m. EDT (1628 GMT), its lowest in over a week. U.S. gold futures for June delivery fell 1.8% to $4,743.50.
The U.S. dollar gained, making greenback-priced bullion more expensive for holders of other currencies, while benchmark 10-Year U.S. Treasury yields rose more than 1%. [USD/]
“Stronger yields and the dollar are putting pressure on gold, along with a lot of headlines and mixed signals coming out about the Iran situation, causing energies to move higher, putting pressure on metals,” Bob Haberkorn, senior market strategist at RJO Futures said.
While gold is seen as an inflation hedge, the non-yielding asset suffers when interest rates are high.
President Donald Trump said on Tuesday that he did not want to extend the expiring ceasefire on Iran and that the U.S. military was “raring to go” if negotiations collapsed.
Crude oil prices rose more than 3% as traffic through the Strait of Hormuz remained largely at a standstill. [O/R]
The surge in oil prices after the U.S. and Israel launched the war against Iran on February 28 has stoked fears of a spike in inflation.
Meanwhile, investors were focused on a Senate Banking Committee hearing regarding the confirmation of Former Fed Governor Kevin Warsh as Fed chief.
“Traders will be watching and listening very closely to (Warsh’s) comments. With that hearing, you should expect lots of ups and downs in volatility,” Haberkorn added.
Among other precious metals, spot silver fell 4% to $76.63 per ounce, platinum lost 2.6% to $2,035, while palladium was down 0.6% at $1,538.78.
(Reporting by Ishaan Arora in Bengaluru; Editing by Alexander Smith, Joe Bavier and Diti Pujara)
By Ishaan Arora
