Gold Weakens, Set to Post Worst Performance Since Mid-November

Gold prices have posted a steep decline and are trading close to an almost three month low early on Friday as US Treasury yields rose again

Arslan Butt•Friday, February 19, 2021•1 min read

Gold Weakens, Set to Post Worst Performance Since Mid-November

Gold prices have posted a steep decline and are trading close to an almost three month low early on Friday as US Treasury yields rose again and dented the appeal of the non-yielding bullion. At the time of writing, GOLD is trading at a little above $1,770.

So far this week, the yellow metal has lost around 3% of its value, marking the worst weekly performance seen since mid-November, after the benchmark 10-year US Treasury yields soared to a one-year high earlier in the week. Higher treasury yields increase the opportunity cost of holding non-yielding gold, taking away its sheen among investors as a result.

Gold’s losses, however, remain limited as the US dollar posted a sudden weakness since the previous session on the release of a disappointing weekly jobless claims report. The number of Americans filing for unemployment claims rose during the previous week, and came in higher than forecast, raising concerns among markets about the state of the US labor market.

Despite a decline in fresh coronavirus cases across the US and a rapid COVID-19 vaccine distribution underway, unemployment remains high in the US. The high number of jobless claims offsets recent optimism from strong economic data releases as it diminishes hopes for the US economy to recover faster than its major peers – a concern that is offering some support to the safe haven gold.

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ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.