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Metals Stocks: Gold prices rise Thursday morning as benchmark U.S. Treasury yield slips to 1.60%

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Gold futures on Thursday were climbing as U.S. benchmark bond yields pulled back and as the dollar saw subdued action in early trade.

A series of good reports on the health of the U.S. economy provided some support for bullion given the threat of inflation.

June gold 
GC00,
+0.69%

GCM21,
+0.69%

was trading $11.40, or 0.6%, to $1,747.50 an ounce, after declining 0.7% a day ago.

A closely followed report on retail sales showed a 9.8% rise in March thanks to $1,400 stimulus checks from the U.S. government to consumers, reflecting accelerating economic growth in the aftermath of the COVID pandemic.

“The US retail sales number have strengthened the optimism among traders,” wrote Naeem Aslam, chief market analyst at AvaTrade, in a note.

“In terms of gold price, we have seen more momentum coming as the dollar index loses its strength further because the Fed Chair already informed markets that rates aren’t going higher anytime soon,” he said.

The dollar was steady, but tilting lower, at 91.60, as gauged by the ICE U.S. Dollar Index
DXY,
-0.01%
,
a measure of the buck against a half-dozen currencies.

That said, bond yields were pulling back, with the 10-year Treasury trading near 1.60%, reducing some of the friction that rising yields create for investors weighing bonds versus precious metals.

A stronger dollar can make dollar-pegged assets less appealing to overseas buyers, while rising yields can make non-yielding bullion comparatively less attractive pit against Treasurys.  

Meanwhile, among other metals traded on Comex Wednesday, May silver 
SIK21,
+0.42%

SI00,
+0.42%

was picking up 10 cents, or 0.4%, to trade around $25.63 an ounce.

In other economic reports, U.S. weekly jobless claims fell by 193,000 to 576,000 in the week of April 10, falling well below economists’ expectations.

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