Gold scales 3-1/2-month peak as stocks, bonds subdued; 10-yr Treasury Yields at 1.63%

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Gold scales 3-1/2-month peak as stocks, bonds subdued; 10-yr Treasury Yields at 1.63%

Precious safe-haven yellow metal gold futures’ prices mushroomed to their strongest in more than three months and a half on Monday, as growing investors’ caution ahead of Wednesday’s FOMC Minutes appeared to have restored the bullion’s safe-haven bid with US Treasury Yields remained largely subdued despite a sharp downturn in the Wall Street.

In point of fact, in the day’s broad-based rally in the bullion’s prices were almost entirely galvanized by an utterly cautious market backdrop with investors turning a blind eye to riskier assets ahead of key policy decisions from US Fed, rekindling a safe-haven appetite for the precious metal.

Nonetheless, the US Federal Reserve is widely anticipated to keep borrowing costs unchanged and to reaffirm its stance on an accommodative monetary policy despite a sharp uptick in inflation, which had also weighed heavily on investors’ morale.

Aside from that, a nearly stagnant US Treasury Yield with 10-year Treasury bond notes last trading at 1.63 per cent, well below a 14-month peak of 1.77 per cent reached last month, seemingly bode well for the bullion.

Gold jumps as US Treasury bond notes subdued

Citing statistics, in the day’s commodity market wind-down, the spot gold futures’ prices skyrocketed as much as 1.32 per cent to $1,866.84 an ounce after hitting a session-high of $1,868.26 earlier on the day, the strongest level since February 1, while US gold futures’ prices ended 1.6 per cent higher to $1,867.60 an ounce.

Meanwhile, citing prospects of further upward spirals in gold futures’ prices, founder of Circle Squared Alternative Investments, Jeffrey Sica said, “There’s a flight to safety out of the equity markets ...

and anticipation that we’re going to continue to see inflation numbers trend much stronger going forward. The Treasury yields will stay about where they are, and that’s going to further increase the likelihood of investors choosing gold”.

On technical front, the spot gold futures had stormed past a 200-day moving average, a widely monitored indicator that suggests further upside momentum in the bullion’s prices. Among other precious metals, palladium added 0.3 per cent to $2,899.78 an ounce, while silver contracts gained 2.7 per cent to $28.15, remarking the strongest level since mid-February.