On Tuesday, the precious yellow metal gold futures had lost grounds despite a fall in US Treasury bond yields that rose to a nearly 14-month peak last week, as a stronger US Dollar seemingly regained its safe-haven bid after US Fed’s Jerome Powell had said in a testimony that a higher US inflation appeared to be on the deck in a near term, though had conferred vague attributes about the extent of a likely inflation-surge, cementing ways for the US Dollar Index (DXY) to hit a two-week high.
Nevertheless, a rapid upsurge in pandemic cases across Europe could support gold futures’ prices over coming weeks, suggested analysts. In factuality, in the day’s large downward spiral in gold futures’ prices was almost entirely galvanized by a stronger American Dollar that appeared to have countered an ease-off of US Treasury bond Yields, which rose to a 14-month peak of 1.74 per cent last week.
Alongside this, an ease of US Treasury Yields usually ramps up the yellow gold contracts’ safe-haven appeal in a normal circumstance, but, in the day’s commodity market, a stronger comeback of the greenback had replaced gold futures’ stance as a safe-haven bid.
Gold falls as US Dollar hits two-week high
Citing statistics, in the day’s FX market closure, US Dollar Index (DXY) measured against a basket of six major currencies advanced 0.5 per cent to 92.30, while the bullion contracts took a header of 0.7 per cent to $1,726.76 an ounce and US gold futures’ prices rounded off 0.8 per cent lower to $1,725.10 an ounce.
Among other precious metals, silver futures’ prices faltered 2.7 per cent to $25.08 an ounce and platinum was plunged 1.1 per cent to $1,170.01 an ounce, while palladium contracts edged 0.2 per cent higher to $2,620.51 per ounce.
Meanwhile, adding that a stronger American currency coupled with hopes of an economic recovery, kept a lid on gold futures’ prices, a director of metals trading at High Ridge Futures, David Meger said, “We see a tenuous gold market on the premise that depending on the given day we see forces pushing or pulling in either direction. ”