Gold Slides as US Bond Yields Rise
Gold closed with a small drop on Monday as the dollar eased and bond yields surged after Fed Chair Jerome Powell on Friday promised to continue the central bank’s program of interest-rate hikes to quell high inflation. Gold for December delivery closed down US$0.10 to settle at US$1,749.70 per ounce.
The drop comes after Powell delivered a hawkish speech to the Fed’s annual Jackson Hole, Wyoming conference, promising to continue to hike interest rates despite costs to growth and employment until inflation is under control.
Gold has “tumbled the most since Friday after Fed’s Powell signalled that interest rates would keep rising and remain elevated for longer,” Saxo Bank said in a note on its website. READ: U.S Dollar Trades Under Pressure over Fed’s Taper Fever
” … We maintain the view of gold being a hedge against the belief the Fed will be successful in lowering inflation without hurting economic growth to the point where the focus returns to central bank support but given the renewed breakdown on Friday and continuation today, the price may in the short term once again look at critical support below $1700.”
The dollar moved lower, making gold more affordable for international buyers. The ICE dollar index was last seen down 0.12 points to 108.68.
Bond yields rose, bearish for gold since it offers no interest. The yield on the US 10-year note was last seen up 7.4 basis points to 3.108%. # Gold Slides as US Bond Yields Rise
