Gold prices fell in trading today, Thursday; The recovery in US Treasury yields reduced the demand for safe haven bullion stemming from the Ukraine crisis and its potential impact on the global economy.
Yesterday, Wednesday, gold prices ended their trading with a decline for the second consecutive session, hitting its lowest level in more than a week.
Gold Prices Today
The price of gold futures contracts – for June delivery – decreased by 0.66%, to reach the level of $1944.40 an ounce.
The spot price for the yellow metal also declined by 0.6%, to record $1,946.06 an ounce.
At the same time, the price of silver futures contracts – May delivery – decreased by 2.05%, at $ 24.66 an ounce.
The spot platinum price also fell by 1.04% at $979.82 an ounce, while the spot palladium price fell 0.5% at $2438.93 an ounce.
US Bonds
US 10-year Treasury yields rose after falling from 3-year highs yesterday, Wednesday, and the rise in US bond yields came amid expectations that the Federal Reserve will raise interest rates aggressively; To counteract inflation accelerating at its fastest pace in 40 years.
Gold is very sensitive to rising US interest rates; It increases the opportunity cost of zero-yield bullion.
“Since the critical $2,000 level was not broken, and the pullback came with profit taking, gold will look to consolidate in the near term and is currently trading at $1,940 to $1,960 an ounce,” Goldsilver Central Managing Director Brian Lane said.
Gold Market
Earlier this week, gold prices rose close to the $2000 level; Due to concerns about the conflict between Russia and Ukraine, rising inflationary pressures have increased safe haven purchases.
ANZ analysts revealed that geopolitical risks and inflation pressures are currently the main drivers of the gold market.
They added that a 75 basis point rise in interest rates could be a disincentive to prices in the short term, while higher inflation due to supply shocks could mitigate.
However, the dollar fell for the second time in a row; This makes gold priced in dollars more attractive to other currency holders, and cover losses.
Spot gold could test resistance at $1,61 an ounce, a breakout if you exceed that amount could lead to gains of up to $1,975, according to technical analyst Wang Tao.
Political Risk
Last Monday, gold prices approached the key level of $2000 an ounce, as the deteriorating Ukraine crisis and mounting concerns about inflation pushed investors to safety in gold.
The basis for demand was gold’s ability to hedge against multiple risks: the war in Ukraine, a sharp rise in global inflation, the Federal Reserve’s hawkish pivot, and the subsequent reversal of the two- and 10-year US Treasury yield curve, according to UBS analysts.
Source: XglobalMarkets
