Gold Cautious as Markets Focus on US Stimulus to Propel Economic Recovery
Gold is exhibiting signs of cautious trading on Thursday as US Treasury yields maintain their strength, denting the appeal of non-yielding
Gold is exhibiting signs of cautious trading on Thursday as US Treasury yields maintain their strength, denting the appeal of non-yielding bullion among investors even as a positive sentiment causes movement towards riskier instruments in global markets. At the time of writing, GOLD is trading at a little above $1,734.
Gold has come under pressure in recent sessions, losing its safe haven appeal, as bond yields continue to strengthen across the US and several other countries worldwide. The uptick in the benchmark 10-year US Treasury yields have driven fresh strength in the US dollar, and both these factors have contributed to the bearish moves in the precious metal lately.
Meanwhile, the risk appetite among investors is also on the rise amid increasing hopes for the global economy to recover from the pandemic-driven slump on the back of the COVID-19 vaccine distribution and increased stimulus and monetary easing efforts. US consumer prices posted an increase, although a smaller than expected rise, indicating an improvement in economic conditions in the near future.
The US Congress has given its final approval for President Biden’s COVID-19 relief package worth $1.9 trillion. While additional fiscal stimulus measures typically support gold prices, the focus is now on how these measures could help the US economy recover faster than its peers, which is again supporting the dollar and keeping the yellow metal prices under pressure as a result.
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