By Administrator_India
Gold prices touched a near six-week low on Monday, extending losses from the previous session, as a stronger dollar and higher U.S. Treasury yields pressured the non-yielding bullion.
Spot gold fell as much as 1.7% to $1,816.53 per ounce, its lowest since Dec. 2, and was down 0.7% at $1,835.96 by 0259 GMT. Prices fell as much as 4.4% on Friday.
“The glory days of gold are over,” said Stephen Innes, chief global market strategist at Axi.
“Higher U.S. yields are starting to have quite a negative effect on gold and the market continues to get stopped out of a lot of positions, as they weren’t prepared for these moves in the U.S. dollar.”
The U.S. 10-year Treasury yield held firm above 1%, helping the dollar scale a near three-week peak against rival currencies, making bullion expensive.
Higher bond yields increase the opportunity cost of holding gold.
Investors also took note of Federal Reserve Vice Chair Richard Clarida’s comments on Friday that the U.S. economy was headed for an “impressive” year, helped by coronavirus vaccines and potential for larger government spending.
U.S. President-elect Joe Biden on Friday hinted at more direct pandemic relief to families, including $2,000 stimulus checks after data showed the U.S. economy shed jobs for the first time in eight months in December.
“If the Fed signals that they will increase interest rates before 2023, then that will have a significantly negative impact on gold,” Innes said.
Silver fell 2.6% to $24.71 an ounce, after dropping as much as 4.2% earlier in the session.
Platinum fell 2.7% to $1,036.14, while palladium shed 0.6% to $2,355.16.