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  • Writer's pictureanalysiswatch

Title: Gold Down as U.S. Yields Resume Rally

Apr 21, 2022 01:13AM ET

By: AnalysisWatch

Gold was down in Asia Thursday morning, with rebounding U.S. Treasury yields countering safe-haven demand due to the ongoing war in Ukraine and its potential impact on the global economy.

Gold futures fell 0.13% to $1,953 by 1:08 AM ET (5:08 AM GMT), while the dollar, which normally moves inversely to gold, rose slightly on Thursday.

Yields on 10-year U.S. Treasury bonds are back on an uptrend after falling from three-year highs on Wednesday. U.S. bond yields have risen on expectations that the Federal Reserve will aggressively raise interest rates.

Investors are now awaiting comments from Fed Chairman Jerome Powell and European Central Bank President Christine Lagarde, who are scheduled to speak at an International Monetary Fund event later in the day. Bank of England Governor Andrew Bailey will speak a day later.

People have probably decided to take profits... and shift funds into equities or even short-term Treasury bonds because the critical $2,000 level has not been breached, "Brian Lan, managing director of GoldSilver Central, told Reuters.

Lan added that gold would be looking to consolidate in the near term and is currently hovering around $1,940 to $1,960 per ounce.

The yellow metal approached $2,000 earlier in the week as worries about the war in Ukraine, sparked by the Feb. 24 Russian invasion, and rising inflationary pressures boosted safe-haven assets.

"Geopolitical risks and inflationary pressures are currently the two main drivers for the gold market." An aggressive 75 basis point rate hike by the Fed could provide a short-term price drag, while increased inflation due to supply shocks could mitigate the negative impact, "ANZ Research analysts said in a note.

In other precious metals, silver slipped 0.4%, palladium fell 0.2%, and platinum was unchanged at $986.86.

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