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Gold prices fell hard Tuesday, breaking beneath the $1,700 support it has held since mid-March, as rival dollar reached a key bullish level on rising U.S. bond yields.

Benchmark gold futures on New York’s Comex settled down $28.60, or 1.7%, at $1,686 an ounce, after falling to as low as $1,678.80. It was the first time Comex gold had revisited the $1,600 levels since March 12. It was also the biggest one-day drop since Feb. 26.

The spot price of gold traded not far from futures, down $28.06, or 1.6%, at $1,684.30 by 3:50 PM ET (19:50 GMT), after an intraday low of $1,678.90. Fund managers sometimes rely on the spot price more than futures for direction.

The Dollar Index, which pits the greenback against six major currencies, shattered its key 93 ceiling, piling fresh pressure on gold. The dollar catapulted after yields on the U.S. 10-year Treasury note reached 1.77% — a high not seen since January 2020.

Both bond yields and the dollar are surging on U.S. economic recovery hopes despite a tick up in Covid-19 infections from new variants of the virus.

A combination of an accelerating vaccine rollout program and the prospect of an additional $3 trillion to $4 trillion in infrastructure spending from the Biden administration is fueling optimism that the U.S. economy will bounce back much faster than initially expected.

“Gold is unloved amid higher yields,” Sophie Griffiths, a U.K.-based market analyst

“We have seen signs of the reflation trade questioning the Federal Reserve’s ability to keep interest rates at current ultra-low levels. The fresh leg high in yields is hitting demand for non-yielding gold hard.”

Technical charts, however, indicated the yellow metal could recover if it hit under $1,665.

“Weekly chart price action reflects credible support on 100-week Simple Moving Average at $1,663,” said Sunil Kumar of SK Dixit Charting.

“A steady reversal will still need prices sustaining above $1,707-$1,720. Upside can be seen from $1,720 to $1,745 and $1,785.”

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