Gold Set For Worst Losing Streak In Almost A Year

Gold prices suffered their fifth straight day losses, setting the safe-haven asset on course for its worst losing streak in almost a year, as U.S Treasury yields held near their highest in a year on expectations that the economy is recovering from the pandemic’s impact.

Progress on the coronavirus vaccine front and the slowing pace of infections are driving optimism over global growth, boosting yields, and weighing on demand for non-interest-bearing bullion, which has sunk more than 5% this year.

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Spot gold fell as much as 0.4 percent to $1,786.74 an ounce and traded at $1,790.71 at 7:40 am Nigerian time, falling below the $1,800 mark. Should price end any lower on Wednesday, it would be gold’s worst run since March 2020, following its 1.3 percent drop on Tuesday.

Benchmark 10-year US Treasury yields today rose to their highest level in a year, increasing the opportunity cost of non-yielding gold. The dollar index rebounded 90.660 from a three-week low.

“The dollar rebound might not be over if global bond yields continue to rally,” said Oanda’s Moya. “And that could be the bearish catalyst that sends gold down to the $1,750 level.”