Gold price nears 2-month peak as yields slide
Gold prices jumped as much as 1% on Wednesday, propelled by sliding US Treasury yields and renewed concerns about the pandemic, driving investors towards haven assets.
Spot gold rose 0.8% to $1,791.60 an ounce by 12:15 p.m. ET, having earlier hit its highest in nearly two months at $1,797.55. US gold futures saw a gain of 0.9% to $1,794.90 an ounce in New York.
“Gold’s pain over the last couple of months has been the rising Treasury yields and now that has pretty much been alleviated,” Edward Moya, senior market analyst at OANDA, told Reuters.
“The current outlook for the global economy is still mixed…You’re going to see a much more cautious approach in the next quarter and that’s probably going to see gold start to see some safe haven flows,” Moya added.
Meanwhile, benchmark 10-year US Treasury yields languished below 1.6%, further reducing the opportunity cost of holding non-interest bearing gold. Bullion got a further lift this week from a subdued Wall Street and also seemed to largely overlook a firmer US dollar, Reuters reported.
The technical scenario for gold has improved since prices broke above key resistance at $1,750, ActivTrades Chief Analyst Carlo Alberto De Casa said in a note, adding any news regarding more monetary stimulus could be seen as a further positive market driver.
