By Barani Krishnan
Investment.com – Gold fell less than $ 10 since returning to $ 1,800 an ounce on Monday, before retreating as US bond yields rose after three days of poor performance.
on the New York Comex floor decreased $ 9.60, or 0.5%, at $ 1,770.60 / ounce. Before that, it had hit a seven-week high of $ 1,790.35, the closest having reached $ 1,800 since Feb. 26.
Gold prices are not far in the future, trading down $ 4.67, or 0.3%, at $ 1,771.70 at 3:00 p.m. ET (19:00 GMT), after hitting a high the most is $ 1,790.06. Spot gold moves are indispensable for fund managers, who sometimes rely on it more than futures for direction.
US bond yields, measured in numbers, hit an intraday high of 1,615% on Monday, after falling to a one-week low of 1,555%. The 10-year bond was at a 14-month high of 1.77% on March 30.
Ed Moya, head of US market research at online broker OANDA, said: “The outlook is getting very optimistic for gold, but in the short term, the price could be in a period. change.
“While the fundamentals are still very strong for the US economy and that is eroding the need for safe haven, the gold market is focusing on recovery across Europe and inflation concerns. in emerging markets. A stronger euro and global warming pressure is what gold will need over the next few months to reach $ 1,900. “
Since the beginning of this year, gold has been facing headwinds as the dollar and bond yields often soar on the argument that a post-pandemic US economic recovery could exceed expectations, leading to concerns about spiraling inflation as the Federal Reserve keeps interest rates close. zero.
Gold had a streak in mid-2020 when it rose from a March low of under $ 1,500 to a record high of nearly $ 2,100 in August, in response to inflation concerns caused by the bailout. The first US financial aid worth 3 trillion USD was passed for the coronavirus pandemic.
However, the breakthroughs in vaccine development since November, coupled with optimism about an economic recovery, have forced gold to close trading in 2020 at just under $ 1,900.
This year, the situation got worse when gold first dropped to $ 1,800 in January, then fell below $ 1,660 at some point in March.
Such weakening of gold is noteworthy if considered from the point of view of the $ 1.9 trillion Covid-19 stimulus passed by Congress in March and the Biden administration plans to spend. add for infrastructure $ 2.2 trillion.
Usually, the stimulus measures lead to dollar devaluation and inflation causes gold to appreciate as an inflation hedge. But the logical sell-off has instead been on gold for the past six months.
The copper, which broke the greenback against and five other major currencies, weakened to 91.07 from Wednesday’s settlement of 91.54.