Gold Set to Post Weekly, Monthly Decline as US Treasury Yields Strengthen
On Friday, gold is trading somewhat steady as markets await latest updates on President Biden’s proposed $1.9 trillion stimulus package, which is yet to be passed by Democrats. At the time of writing, GOLD is trading at a little above $1,844.
Gold is all set to post a decline for the week as well as the month as the US dollar regained some of its strength amid uncertainties surrounding the next round of fiscal stimulus for the US economy. In addition, higher US Treasury yields also drove the dollar higher and weakened the safe haven appeal of gold during the first month of 2021.
Gold prices also came under pressure after recent data releases from the US reassured markets of the state of the US economy – unemployment claims declined during the past week while the US GDP for Q4 2020 came in at +4%. Meanwhile, Democrat leaders have urged the Biden administration to speed up its rollout of the next round of stimulus even as Republicans remain opposed to the size of the stimulus and some of its proposals, including increasing minimum wage and sick leave.
Gold is also facing downward pressure from reports that the demand for the yellow metal declined to an 11-year low during 2020. In addition, the demand for gold across India – the world’s second largest consumer of physical gold, declined to the lowest level seen in 26 years, as per figures released by the World Gold Council earlier this week.
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