Gold tops $1,800/ounce as US bond yields, dollar slide ahead of ECB rate decision

Spot gold prices surpassed $1,800/ounce-mark ahead of ECB rate decision on Thursday

by Sourav D
Gold tops $1,800/ounce as US bond yields, dollar slide ahead of ECB rate decision

On Thursday, spot gold prices topped a psychological resistance level of $1,800/ounce in early European trading ahead of ECB rate decision scheduled to be released at GMT. 11.45, as US bond Yields had tumbled with 10-year US Treasury bond notes reporting their worst intra-session plunge since August 13 and American currency had lost footings, however, a robust risk-appetite in global equity markets kept a lid on the bullion’s gains.

As of early European trading, spot gold prices were trading 0.36 per cent higher to $1,802.55 an ounce with US 10-year Treasury bond Yields hovering at 1.55 per cent, while US Dollar Index (DXY) measured against a basket of six major currencies on an average shed 0.12 per cent to 93.72, extending yesterday’s decline.

Gold gains as US Dollar loses momentum ahead of ECB rate decision

In point of fact, in the day’s upbeat momentum in spot gold prices was almost entirely prompted by a restoration of safe-haven appeal of the safe-haven yellow metal, as a steep downhill slide in US Treasury Yields alongside a weakening US Dollar had cemented ways for the bullion to spiral upwards.

Besides, European Central Bank (ECB) rate decision due later today appeared to have played a pivotal role in spurring up the bullion’s safe-haven appeal, though ECB policymakers would more likely to keep rate unchanged at 0.0 per cent with negative depository interest rate alongside an extension of economic stimulus until end-December seemingly on the card.

Citing statistics, on Wednesday’s commodity market round-off, spot gold ended 0.2 per cent higher to $1,796.55 after plunging as much as 0.6 per cent earlier in the session, while US gold futures’ prices settled 0.3 per cent higher to $1,798.80 an ounce.

Though, as gains were checked amid growing appetite of riskier assets in the wake of a pluperfect Q3, 2021 earnings’ season, a senior market analyst at brokerage OANDA, Edward Moya said, “We are in a consolidation period for gold, but I think that eventually the policy tightening and inflation concerns should be positive for the metal.

Earnings have been fairly impressive, and that is surprising a lot of people... U.S. tech stocks are a favourite place to go for many investors, which is dampening the demand for a safe haven right now”.