Gold slides more than 1 per cent to seven-week low as US yields jump on rate hike bet
by SOURAV D | VIEW 1221
On Tuesday, both spot gold and US gold futures’ prices had beaten hasty retreats with spot gold tumbling as much as 1.0 per cent, as American currency had spiked to a nearly 10-1/2-month peak and US Treasury Yields had spurred up over prospects of an earlier-than-anticipated rate hike from the US Federal Reserve. In point of fact, in the day’s Newtonian upsurge in American Dollar, which appeared to have hammered down the bullion’s prices, was mostly prompted by the likelihoods of a hike in benchmark borrowing cost from the US Fed as early as by 2022, as nine out of eighteen Fed policymakers had raised voices over a tapering of fiscal support by November and a rate-hike by 2022, much earlier than a prior projection of end-2023, eventually stoking a safe-haven bid for the American currency.
Gold tumbles over 1.0 per cent as US Treasury Yields, US Dollar flare up
Citing statistics, in the day’s late-afternoon US trading hours, spot gold prices had edged 0.8 per cent lower to $1,736.81 an ounce after hitting a 1-1/2-month low of $1,726.19 per ounce earlier in the day, while US gold futures faltered 0.8 per cent to $1,735.5 an ounce.
US Dollar Index (DXY) measured against a basket of six major currencies rose 0.4 per cent, while US 10-year Treasury bond notes were last trading at 1.525 per cent. Meanwhile, referring to latest US Fed policy meet, a head of commodity strategies at TD Securities, Bart Melek said, “The dot plots set by FOMC members signalling an earlier-than-previously-expected rise in Fed’s fund rates, and the move higher across the yield curve continue to have a negative impact on gold”.