Gold jumps 1% as US Dollar dives to two-week low, bond Yields ease

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Gold jumps 1% as US Dollar dives to two-week low, bond Yields ease

On Tuesday, the precious safe-haven yellow metal gold futures’ prices climbed nearly 1 per cent amid a broad-based weakness in American currency, while a further ease-off of US Treasury bond Yields to 1.65 per cent from a 14-month peak of 1.77 per cent hit a week earlier, helped bullion contracts regain their safe-haven bids.

In the day’s US market closure, gold futures had feathered up to its highest level in a week, while the greenback that fell against most major and emerging market currencies, was harbouring at a two-week low. In point of fact, latest upsurge in spot gold futures’ prices appeared to have stemmed off a steady decline in US Dollar Index (DXY) alongside a lower US Treasury bond Yields, though many analysts had expressed sheer scepticism about the sustenance of recent rally in the bullions’ prices given a flurry of upbeat US economic data.

Surprisingly, latest gold-buying frenzy began just days after the US President Joe Biden had unwrapped a $2 trillion-plus investment proposal, while a number of upbeat economic data such as an all-time high US Services Sector activity, a sharp uptick in non-farm payroll alongside a two-year peak Job Openings in February released earlier in the day, had failed to prevent a persistent depreciation in US Dollar.

Gold gobbles up 1 per cent in gains as US Dollar drools

Citing statistics, in the day’s commodity market wind-down, spot gold futures’ prices gained 0.8 per cent to $1,743.03 an ounce after hitting a session high of $1,745.14 per ounce, its strongest level since March 25, while US gold futures’ prices edged 0.9 per cent higher to $1,734 an ounce.

Among other precious metals, silver futures’ prices climbed 1 per cent to $25.14 an ounce, palladium added 0.5 per cent to $2,676.74 per ounce and platinum futures jumped 2 per cent to $1,232.52 an ounce, while the US Dollar Index (DXY) measured against a basket of six major currencies on an average plunged 0.30 per cent to 92.26, the greenback’s lowest level in two weeks.

Meanwhile, adding the prospects of huge fiscal stimulus had offset US Treasury bond Yields’ safe-haven appeals in a near- to intermediate-term outlook, a head of commodity strategies at TD Securities, Bart Malek said, “Investors believe that we are not going to see another huge run-up in the yields and that has prompted gold to technically rebound”.