On Tuesday, the safe-haven spot gold futures’ prices tumbled more than 2 per cent to their three-week lows, as a flurry of key fundamentals including a buying-spree in US Treasury bond Yields that sent 10-year bond notes to a roughly 14-month peak, a firmer American currency alongside hopes of a solid economic recovery, had soured the bullion’s safe-haven appetite.
Simply put, in the day’s sweeping plunge in precious yellow metal was mostly catalysed by an upsurge in US Treasury bond Yields, largely boosted by the prospects of a higher inflation ahead of the US President Joe Biden’s multi-billion-dollar infrastructure plan as beforementioned.
Apart from that, with inflation concerns stemming a rise in US Treasury bond Yields, a stronger US Dollar in tandem had threatened the precious metal’s buying appeal further, eventually causing a perilous dive below $1,700/ounce, though analysts were quoted saying that spot gold futures’ prices might find a critical support level at $1,670 per ounce considering their 200-day moving average.
Gold tumbles as rising US Treasury Yields dampen the bullion’s safe-haven bid
Citing statistics, in the day’s commodity market closure, spot gold futures wrapped up 1.6 per cent lower to $1,684.64 after hitting a session low of $1,678.40 an ounce earlier in the session, the bullion’s lowest level since March 8, 2020, while US gold futures’ prices plummeted 1.7 per cent to settle down at $1,686 an ounce.
Meanwhile, underscoring a firmer US Dollar alongside an unprecedented rise in US Treasury bond Yields, a senior market analyst at OANDA, Edward Moya said, “The short-term drivers just appear to be becoming very bearish for gold.
” Among other precious metals, in context of a squeezed supply chain, palladium futures’ prices rose 1.8 per cent to $2,574.26 an ounce, while Silver futures faltered as much as 2.5 per cent to round off the day at $24.05 per ounce.