Precious Gold posts worst weekly decline since March



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Precious Gold posts worst weekly decline since March

On Friday, the precious safe-haven metal gold futures had tumbled and marked up their worst weekly percentage decline since March this year, as a rise in US Treasury yields alongside an impasse over another round of pandemic stimulus bill had dented the metal’s safe-haven appeal.

Besides, while investors were awaiting a resumption of US-China trade talk scheduled to begin on August 15 amid an already escalated tension between Washington and Beijing, frets of further deterioration in Sino-US trade relationship had prompted the investors to secure profits after a record-settling rally, which in effect had also weighed down the gold futures’ prices, while the silver futures had also snapped their nine-week long winning streak.

Apart from that, analysts had also blamed a quicker-than-anticipated market movement on gold buying spree behind this week’s decline, while a rise of benchmark US 10-year Treasury Yield to a fresh seven-week high had also prodded small-scale investors to shed the precious metal’s stakes from their portfolios.

Pandemic relief logjam, higher yields drag gold futures prices

Citing statistics, on Friday’s commodity market closure, spot gold futures’ prices had toppled 0.5 per cent to $1,9943.18 an ounce and the US gold futures had faltered 1 per cent to settle down at $1,949.80 an ounce, however, after hitting an all-time high of $2,072 an ounce on last week, the gold bullion had registered a decline of 4.5 per cent.

Meanwhile, addressing to a standstill on second round of pandemic relief bill alongside a much-quicker rally of gold futures’ prices, a director of metal trading at High Ridge retracement, David Meger said on Friday’s commodity market round off, “The gold market had been in a parabolic state, so when you throw a little pickup in yields along with the impasse on the stimulus bill, it was going to see a bit of a retracement.

We might have gone a little too far, too fast, and we believe the market is in need of a pause, a consolidation. And that's exactly what we are seeing.