Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Gold Extends Drop as Surge in Treasury Yields Weighs on Demand

CommoditiesMar 18, 2021 10:00PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Gold Extends Drop as Surge in Treasury Yields Weighs on Demand

(Bloomberg) -- Gold fell a second day as bond yields surged, with some investors shrugging off the Federal Reserve’s dovish message and betting that the central bank will allow inflation to overshoot amid an economic rebound.

On Thursday, yields on benchmark 10-year Treasuries climbed as much as 11 basis points to 1.75% -- the highest since January 2020 -- while the 30-year jumped to 2.5% for the first time since August 2019. Fed Chairman Jerome Powell’s willingness to let the economy run hotter with central bank support has boosted expectations for faster inflation. He also indicated he wasn’t concerned over the recent jump in long-term yields, with his focus still on whether financial conditions remained accommodative.

The rise in bond yields has weighed on demand for bullion which doesn’t offer interest, although its role as a hedge against inflation has helped provide some support to prices. During his press conference after the Fed’s meeting this week, Powell said that the price increases this year are likely to be transient and won’t be seen as progress toward the central bank’s long-term goals.

“Powell didn’t say enough to calm the bond market yet, but he has a few speeches coming up soon which could see a change of tone,” John Feeney, business development manager at Sydney-based bullion dealer Guardian Gold Australia. “Gold investors are too fixated on bond yields right now, and ignoring the fact that gold can still rise in environments where bond yields and interest rates rise, as long as we see inflation.”

Spot gold fell 0.4% to $1,730.06 an ounce by 9:11 a.m. in Singapore, after dropping 0.5% on Thursday. Silver and platinum both retreated. The Bloomberg Dollar Spot Index was flat after climbing 0.5% on Thursday.

On Friday, investor focus will be on the Bank of Japan which is expected to tweak its bond yield management and asset purchases after a policy review. Markets will also be monitoring the first high-level talks between the U.S. and China since President Joe Biden took office.

Meanwhile, palladium has surged 13% this week, the most in a year, on estimates for a larger-than-expected deficit after biggest producer MMC Norilsk Nickel PJSC (OTC:NILSY) cut its 2021 output targets following flooding at its Arctic mines.

©2021 Bloomberg L.P.

Gold Extends Drop as Surge in Treasury Yields Weighs on Demand
 

Related Articles

Oil Inventories Rise by 4.1M Barrels Last Week: API
Oil Inventories Rise by 4.1M Barrels Last Week: API By Investing.com - Sep 28, 2021 8

By Yasin Ebrahim Investing.com - U.S. crude stockpiles unexpectedly rose last week following a strong start to the week in oil prices amid global energy crunch in natural...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
zero spam
zero spam Mar 19, 2021 12:02AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
who writes these articles? how is gold extending drop? it went up yesterday and dropped a bit and is still making higher lows and higher highs.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email