Gold drops on firm Treasury yields, dollar

The nation press services
2021-04-12 | Since 1 Month

Gold prices declined on Monday as US Treasury yields and dollar firmed following beyond expectation US economic data that lifted prospects for higher inflation.

Spot gold fell 0.4% to $1,735.90 per ounce by 05:35 GMT while US gold futures were down 0.4% to $1,737.10 per ounce.

Margaret Yang, DailyFX strategist said, "stronger-than-expected data suggests that inflation (will be) picking up faster-than-expected in months to come, which is leading to a rise in real yields, exerting pressure on gold."

 

Gold serves as a shield against inflation but higher Treasury yields reduce the appeal of the non-yielding metal.

In a note, Jeffrey Halley, OANDA senior market analyst said, "for now, gold looks set to trade quietly in a $1,730 to $1,760 range, with Bitcoin seemingly the safe-haven asset of choice at the moment."

"In the meantime, gold remains at the mercy of the US 10-year Treasury yield."



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