Gold Edges Higher, But Set to Post Weekly, Monthly Declines
Gold is ticking higher, recovering after touching the lowest levels seen in a week, but is all set to end the week and the month in red amid
Gold is ticking higher, recovering after touching the lowest levels seen in a week, but is all set to end the week and the month in red amid increased optimism among traders for global economic recovery and a strengthening in US Treasury yields. At the time of writing, GOLD is trading at a little above $1,764.
So far this week, the precious metal has lost around 0.6% of its value and prices are down by 4% through the month of February. The safe haven appeal of gold has taken a hit over an increase in COVID-19 vaccine rollout programs across the world, which has raised hopes for swift economic recovery.
Meanwhile, the benchmark 10-year US Treasury yields soared to the highest level seen since the start of the coronavirus pandemic, exerting further downward pressure on the yellow metal. Higher bond yields increase the opportunity cost of holding non-yielding bullion, thereby reducing its appeal among investors.
Treasury yields have been ticking higher in recent sessions amid increased expectations for a pick-up in inflation, supported by fiscal stimulus and monetary easing. In addition, the Fed recently indicated that it was not worried about the rise in bond yields, driving additional weakness in gold prices.
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