Gold is on an extremely bearish footing on Tuesday, slipping to an over two-week low on account of a strengthening in US Treasury yields and the dollar over rising expectations for rapid recovery in the world’s most powerful economy. At the time of writing, GOLD is trading at a little above $1,704.

Higher bond yields drive up the opportunity cost of holding non-yielding bullion and make it less appealing as an investment, exerting downward pressure on the yellow metal. In addition, global markets are trading with a risk-on sentiment, diminishing the safe haven appeal of gold and sending traders towards riskier instruments.

Gold has come under pressure in recent weeks as markets and even officials from the US government and central bank anticipate the economy to post a swift recovery, boosted by strong COVID-19 vaccine rollout programs and multiple rounds of fiscal stimulus. Traders are turning increasingly hopeful that the improved economic outlook would be further supported by an improvement in consumer spending, which in turn would hike up inflation – one of the main reasons that has been strengthening US Treasury yields.

Analysts have also forecast further bearishness in sight for the precious metal on the back of rising hopes for global economic recovery. However, gold prices are likely to enjoy some support from the latest wave of the pandemic that has sent parts of Europe back into lockdown mode even as emerging markets like Brazil and India are also reporting a spike in fresh infections.