Gold Bugs Facing Havoc Over Strong U.S Dollar

The surge in the greenback and 10-year yields in recent times, following the better-than-expected February monthly payroll data from the world’s largest economy, initially looks like gold might continue to head south

However the precious metal has been able to pare some of its losses and stabilize in line with softening US yields currently hobbling around $1,700/oz.

The greenback is standing firm, pushing towards a 3-1/2-month high, as a broad rise in 10 year yields spooked investor sentiment in global equity markets.

Market pundits expect the yellow metal prices to face more price correction.

The yellow metal had lost more than 2% in value over the past few days at the futures market after dropping as low as $1,689 per ounce the lowest level in about 11 months.

Recent price actions suggest the U.S dollar’s most recent stability is further clamping down on gold bugs.

Compounding the woes for gold bugs is also a critical macro that reveals risker assets like Bitcoin and energy-based commodities have seen a significant amount of buying pressure, meaning investors are becoming less attracted to the bullion asset.

Although the precious metal has recently rebounded from the lost ground to fresh nine-month lows as the bulls fight hard to keep the price above the $1,700 per ounce price levels, meaning the outlook for the precious metal in the near term edges towards a bearish bias and neutral in the midterm.

That being said, market pundits expect the yellow metal prices to face more price correction probably trading at a range between US$1650-1715/ounce range in the midterm if that gives way, it will likely be due to a strong US dollar or surging US real yields.