Gold Edges Higher as US Treasury Yields Retreat From One-Year High

Gold is gaining strength in early trading amid a decline in US Treasury yields even as the possibility of more fiscal stimulus being rolled

Written by: Arslan Butt • Tuesday, March 2, 2021 • 1 min read

• Last updated: Tuesday, March 2, 2021

Gold Edges Higher as US Treasury Yields Retreat From One-Year High

Gold is gaining strength in early trading amid a decline in US Treasury yields even as the possibility of more fiscal stimulus being rolled out in the US supports its safe haven appeal. At the time of writing, GOLD is trading at a little above $1,720.

After rising to the highest levels seen in a year, the benchmark 10-year US Treasury yields eased lower in the previous session following comments from Fed officials dismissing worries about high inflation. The possibility of reinflation had sparked fears in global financial markets, which had sent government bond yields higher, increasing the opportunity cost of holding non-yielding gold and denting its appeal among investors.

Gold also finds support from progress in the finalizing of President Joe Biden’s proposal for an additional $1.9 trillion worth of fiscal stimulus measures. After the stimulus bill was passed by the House, the Senate is set to debate the relief bill in the coming days.

Higher stimulus measures to boost recovery weaken market confidence in the US economy and dollar, and make gold more attractive as an investment. However, recent optimistic data about the state of the US manufacturing sector is keeping lids on the precious metal’s gains for now.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

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.