Gold gives up its 7-week peak as bond yields rise


Gold retreated from its highest level in more than seven weeks, Monday, with the rise in US Treasury bond yields, which affected the lure of the non-yielding metal and weakened the impact of the dollar’s decline.
By 1621 GMT, the spot price of gold was down 0.3 percent at $ 1771.40 an ounce, after touching $ 1789.77, its highest level since February 25.
US gold futures lost 0.5 percent to $ 1771.30.
“We are likely to see a gradual increase in US interest rates with a gradual uplift of the yield curve, which will dampen some of the gold’s momentum,” said Daniel Ghali, commodity market strategist at TD Securities.
The yield on the benchmark US ten-year bonds exceeded 1.6 percent after hitting a multi-week low last week.
Gold has lost more than 6% since the beginning of this year, mostly affected by the rise in US bond yields.
But the dollar’s ​​decline eased gold’s losses, as the green currency fell to its lowest level in more than six weeks against competitors.
In other precious metals, silver fell 0.8 percent to $ 25.75 an ounce, and platinum settled unchanged at $ 1,203.31.
Palladium rose 1.4 percent to $ 2,814.99 an ounce, after increasing to $ 2,845.50, its highest level since February 2020.

Exchange Rates

The dollar fell to its lowest level in six weeks against major currencies, on Monday, as markets absorbed the tumbling of US Treasury yields last week after the Federal Reserve renewed its saying that any surge in inflation will likely be temporary.
The US currency was affected by the improvement in risk appetite as evidenced by the rally in global stocks to record levels.
Bitcoin stabilized after its losses on Sunday, when it declined by up to 14 percent to 51,541 dollars, which was attributed by a report to news of a blackout in China.
Bitcoin settled unchanged at 56 thousand and 265 dollars.
The dollar index, which measures the greenback’s strength against other major currencies, fell 0.57 percent to 91.096, continuing a downward trend that began on March 31.
The greenback’s decline reached its extent in early trade, when it hit its lowest levels in several weeks against major currencies such as the Japanese Yen, Swiss Franc, Australian and New Zealand Dollars and the Euro.
The yield on US 10-year Treasury notes rose slightly to 1.6082 percent, after falling last week to 1.5280 percent from 1.7760 percent in March.
“Indeed, the rally of the US dollar has become just a memory from the distant past, and the currency’s lackluster performance appears to be due to the contrasting horizon between declining and rising US Treasury yields elsewhere,” said Valentin Marinoff, Director of Exchange Market Research at Credit Agricole.
“This is almost the opposite of what we saw in March,” he said.
The euro rose above $ 1.20 for the first time in more than six weeks, touching a peak of $ 1.2048 before retreating in morning trade in New York to $ 1.2022.
The European Central Bank meets on Thursday amid internal divisions over the pace of bond purchases, extended COVID-19 closures and possible delays to the European Union recovery fund.
Against the Japanese currency, the dollar recorded 108.2750 yen, its lowest price since the fifth of March.


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