Gold Drops a Fifth Day as Bond Yield Rally Delivers ‘Fatal Blow’

imageCommodities7 hours ago (Feb 17, 2021 00:54)

© Reuters.

(Bloomberg) — Gold declined for a fifth straight day, putting the haven on course for the longest losing run in almost a year, as Treasury yields surged on expectations that the economy is recovering from the pandemic’s impact.

Progress on the coronavirus vaccine front and the slowing pace of infections is driving optimism over global growth, boosting yields and weighing on demand for non-interest-bearing bullion, which has sunk more than 5% this year. Further losses may be on the horizon after bullion’s 50-day moving average retreated below its 200-day counterpart, a so-called death cross pattern.

“A runaway rally in global bond yields has delivered a fatal blow to gold,” said Edward Moya, senior market analyst at Oanda Corp. “Yields are rising on reflation bets, and that is triggering an unwind of many safe-haven trades.”

Spot gold fell as much as 0.4% to $1,786.88 an ounce, and traded at $1,791.04 by 7:51 a.m. in Singapore. That follows Tuesday’s 1.3% drop, and should prices end lower on Wednesday that would be the worst run since last March.

In other metals, silver and palladium retreated along with platinum, which hit the highest intraday level since 2014 on Tuesday. The Bloomberg Dollar Spot Index rose 0.1%.

“The dollar rebound might not be over if global bond yields continue to rally,” said Oanda’s Moya. “And that could be the bearish catalyst that sends gold down to the $1,750 level.”

©2021 Bloomberg L.P.

Gold Drops a Fifth Day as Bond Yield Rally Delivers ‘Fatal Blow’

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Please enter your comment!
Please enter your name here