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Gold Sinks Anew as Most Markets Fall

Published 03/29/2021, 11:08 AM
Updated 03/29/2021, 04:09 PM
© Reuters.

© Reuters.

By Barani Krishnan

Investing.com - Gold prices sank more than 1% on Monday, breaking new ground lower after a week of sideways trading, as market participants tried to suss out a clear direction for the yellow metal amid climbing yields and the dollar.

Gold futures settled down $20.10, or 1.2%, at $1,712.20  an ounce on New York’s Comex, after falling to as low as $1,705.75. It was the biggest one-day drop in Comex gold since March 18.

The spot price of gold, which fund managers sometimes rely on for direction more than futures, was down $21.20, or 1.2%, at $1,711.49 by 4:00 PM ET (20:00 GMT) after an intraday low of $1,706.90.

Yields on the U.S. 10-year Treasury note neared the 1.7% level while the Dollar Index approached the key 93 level, raising fresh pressure on gold. Most other commodities, along with Wall Street's Dow, S&P 500 and Nasdaq, were lower too.

“Neither the 10-year nor the dollar can be said to be menacingly high for the day, but gold hasn’t had a sizable move in either direction over the past week, so the downsize bias now is probably exaggerated,” said Philip Streible, precious metals strategist at Blueline Futures in Chicago.

“Gold may break below $1,700 support but it should recover.”

Gold bulls have tried unsuccessfully over the past two weeks to break beyond the mid-$1,700 level that would be critical for a return to $1,800 pricing.

In last week’s trade, gold prices went through several hoops before settling slightly lower than where they did a week ago. Most importantly, the market did not crack the key ceiling of $1,750 per ounce, despite coming within less than $4 of meeting that test.

Long associated with tags such as safe-haven, store of value and inflation-hedge, gold has debunked such connotations for at least six months now, plunging particularly when market hype over inflation sent Treasury yields soaring instead.

The yellow metal demonstrated the faith placed on it by investors through the height of the pandemic, rising from March 2020 lows of under $1,500 to reach a record high of nearly $2,100. It has plunged since, briefly turning into a bear market when it lost as much 20% to hit lows under $1,675.

While gold has crawled out of that hole, it's been stuck under $1,750, behaving more like a patient on life support than one on the clear path to recovery.

Latest comments

Hedgefunds in trouble, banks in trouble. Banks in trouble, bond dumping and yields in trouble. Yields in trouble, dollar up. Dollar up, gold down. That’s what I think. I may be wrong
feds will raise rates to stop inflation...to bring dollar down
When my mom died in 2012 gold was 6% lower. Compare that with the path of QQQ and I'm scratching my head why ppl bother with gold at all. Gold crashed in 2020 March like all others. FF - Fake Fancies
Its useless to trade-in any gold physically. With inflation here to stay and storage an issue, Gold has become a liability, frankly. I was severely disappointed by gold's knee-jerk reaction in 2020 March. The chance of getting robbed of your gold reserves, and QQQ and Bitcoin out doing 6% in 9 years is vastly more realistic than governments or banks collapsing. Sorry, practicality outweighs fantasy as population density rises
 My headline tells THE story. I'm NOT PUTTING a negative spin on anything, as much as NARRATING the negatives that are out there. Your comments are as depressing to anyone wanting an outlook on gold. It is what it is (not quoting any politician here). I don't trade but I certainly think gold should be worth a lot more than where it is. Bests.
All the headings above this post show a glory stock market even though the main session is behind us, while THIS article puts a negative spin on the day's price action. I've stopped reading articles due to this annoying constant contradiction in the headlines
Chris: My headline tells THE story. I'm NOT PUTTING a negative spin on anything, as much as NARRATING the negatives that are out there. Your comments are as depressing to anyone wanting an outlook on gold. It is what it is (not quoting any politician here). I don't trade but I certainly think gold should be worth a lot more than where it is. Bests.
Dow Jones ath....obviously that's where the true value investments are. don't worry they can't do it for much longer! 💎🖐
Can you tell when we can sell dj
1670-1680 crucial level. buy on dips and jump
#SHDC 😎😎😎
Many tech stocks also going down 5%.
curious how much if this drop is attributed to the Goldman Fiasco
mira carnal yo hablo español pero si me dices que soy un fiasco por lo menos haz algo importante y y aconséjame no seas pinche envidioso y egoísta eres un perdedor aún así
What fiasco they had?
hedge fund bubble busted causing huge losses to banks.
hi wow
the central bank of the central bank in Basel Switzerland ? BRI...
if you follow gold. you have sideway and suddenly like somebody decide at which level Gold MUST BE. period.
Someone with deep or unlimited pockets
i wonder if we will see an investigation for market manipulation... i bet... not
gold is color TT
the gold era would end soon.
 Well...what happened after the other great empires fell?  People, not governments, start to rebuild with free markets.
and that would have to do with gold what?
While these replacement is happening, gold is king!
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