The precious metal recorded its first weekly profit in four jumping from under $1,700 an ounce, despite a 13-month surge in U.S. bond yields and a soaring U.S dollar that should have tamed the yellow metal’s upside.
Gold futures prices settled at 0.2% higher, to close at $1,719.80 an ounce after plunging earlier to $1,696.65 an ounce.
For the week, the precious metal’s contract surged by 1.3%. It was the first positive week for the yellow metal after three prior weeks of losses that left buyers of the precious metal 8% poorer.
Market pundits are however surprised at gold’s sudden turn around amid fired-up U.S yields benchmarked rallying to 1.64%, their highest since 13 months ago.
Stephen Innes, Chief Global Market Strategist at Axi in an email sent to Nairametrics spoke on the macros affecting gold prices arbitrarily;
“The gold price may have found a floor here and will be comfortable for a bit. But if US yields start to break new ground or the FOMC surprises by hinting at taper (25 % chance), it could be lights out above $1700.
“If you don’t think the US economy will surge and 10-year yields won’t rise to 1.85-2.25% as predicted by Wall street, certainly buy gold and lots of it. But really, you are swimming against the current on this one, I’m afraid.”
Bottom-line: Market sentiments suggest that the yellow metal price may have found a floor thus it could be comfortable in the $1700s range, at least for the near term as physical demand remains stout