Gold price slides to 10-month low, may fall further 1Gold International 

Gold price slides to 10-month low, may fall further

Gold prices continued to slide on Monday as the dollar and US treasury yields kept marching higher and prompted investors to dump the non-yielding metal.

Spot gold dropped another 1.2% to $1,679.67 per ounce by 11:40 a.m. EST, its lowest since early June. US gold futures too fell by 1.2%, down to $1,677.40 per ounce.

Meanwhile, the greenback climbed to a three-month peak, while the US 10-year Treasury yield held close to a more than one-year high, increasing the opportunity cost of holding gold, which pays no interest.

“We have an economy that is recovering and inflation is materializing; that ultimately means that yields have room to move higher,” Bart Melek, head of commodity strategies at TD Securities told Reuters in a note, adding that gold could fall further towards $1,660 as a result.

Even US Congressional approval of President Joe Biden’s $1.9 trillion covid-19 relief package, which would have raised inflation expectations, failed to keep the precious metal afloat.

Gold is widely considered a hedge against inflation that is likely to stem from widespread stimulus, but higher bond yields this year have threatened that status as they translate into a higher opportunity cost of holding bullion.

Analysts also said US Federal Reserve Chair Jerome Powell’s failure to address the recent surge in yields last week further pressured gold.

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