Gold rose nearly 2 on Tuesday, as it gained respite from a retreat in U.S. Treasury yields and the dollar following a slide to a ninemonth low in the last session.
Spot gold rose 1.5 to 1,706.01 per ounce by 1308 GMT, having earlier risen as much as 1.8 to 1,711.16.
U.S. gold futures climbed 1.4 to 1,701.80.
Given the metals zeroyielding nature, falling yields may provide a tailwind for bulls to elevate prices higher, said Lukman Otunuga, senior research analyst at FXTM.
But while gold may extend gains near term, fundamentally, the pendulum swings in favour of bears especially when factoring in how global sentiment is improving on vaccine rollouts and COVID19 cases are falling globally.
U.S. 10year Treasury yields eased, and the dollar slipped against rival currencies.
Gold is also being propped up by some bargain hunting, said StoneX analyst Rhona OConnell.
But theres a split, as some people think the bond market has got a long way further to go downwards, while other people are saying that because of the distribution of positioning, some managers may be starting to look at rebalancing.
Higher bond yields have challenged bullions status as an inflation hedge this year, pushing gold prices to their lowest since June 5 at 1,676.10 on Monday.
Golds current move is a shortterm bounce and not a reversal of the bigger trend, said analyst Xiao Fu at Bank of China International.
The exchangetraded fund outflows are indicating diminishing investor interest, she…