Gold prices ease on strong yields
- 25 Feb 2021
Gulf Today Report
Gold declines on Thursday as US Treasury yields gain momentum reducing the metal’s appeal, however, the decline in dollar curtail its fall.
Spot gold fell 0.4% to $1,797.73 per ounce by 05:40 GMT while US gold futures eased 0.1% to $1,795.90.
DailyFX strategist Margaret Yang said "rising longer-dated yields are a primary weighing factor on the precious metals."
Benchmark US Treasury yields held close to a one-year peak hit in the previous session, increasing the opportunity cost of holding gold, which pays no interest.
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The deceleration by Fed Chair Jerome Powell's to retain the current monetary policy until the economy was back to full employment aided in controlling gold’s losses.
According to ANZ analysts’ note, the demand for gold has reduced as investors look towards investing in other assets.
"We expect gold prices will trade sideways for the next quarter or so as the bond selloff continues and investors play the reflation trade through risky asset classes. But gold's time in the sun is not over."
