The yellow metal drifted lower at the last trading session of the week staying near a nine-month low and headed for a third consecutive weekly drop. U.S. Federal Reserve Chairman, Powell disappointed metal traders on his perception of Treasury yields pushing both the greenback and bond yields up.
At the time of writing this report, Gold futures were down 0.63% to trade around $1,690 an ounce, dropping below the $1,700 price levels. Gold prices dropped to their lowest since Jun. 8, 2020, and have lost about 2.3% for the week so far.
The U.S. 10-year Treasury yield peaked at about 1.5%, while the dollar, which usually moves inversely to gold, bounced up at morning trading session in London.
The most powerful monetary policymaker affirmed his stance to keep credit loose in a speech to the Wall Street Journal jobs summit held yesterday and added that the rise in treasury yields was “notable”, he did not consider it a “disorderly” move.
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics, spoke on prevailing market conditions weighing hard on the precious metal;
“Gold continues to struggle in a trend that started right out of the gates in 2021. And by failing to $1,700 this week, the sell-off may continue.
Rising bond yields and a stronger US have been the most significant obstacle while overall economic conditions improve as the trifecta Covid-19 vaccines roll out in the US.”
Bottom line: Metal investors have increased their sell-off in metals momentarily, with nickel the worst hit of all with $1,500 drops two days in a row.