The precious metal's gains were restrained, however, by rising benchmark 10-year U.S Treasury yields from early July 2021.Rising bond yields will further dampen the price of gold
As investors fret about the debt situation at China Evergrande Group, and how it will affect the economy, gold was up on Monday morning in London.
Futures for gold rose by 0.43% to $1,759 an ounce on the day, but headwinds remain.
The precious metal’s gains were restrained, however, by rising benchmark 10-year U.S Treasury yields from early July 2021.
Rising bond yields will further dampen the price of gold. China Evergrande’s bank accounts have been closely scrutinized by the Ministry of Housing and Urban-Rural Development to ensure funds are used to finish housing projects, not to pay creditors.
An offshore bond payment was missed by the developer the previous week, and a second payment was due later that week.
In the midst of the apex bank’s tapering talks, gold is one asset that remains highly vulnerable. An anticipated delay had been heightened by cooling inflation and weaker employment data, but any renewed strength in the dollar as the program was curtailed would drag down the price of gold.
Besides excluding an issue of CNY-denominated shares, its electric vehicle unit will also not move forward with a planned issue.
As investors monitored the situation at China Evergrande, they turned to the yellow metal as a safe haven. China, a top gold consumer, saw its demand for gold rise during the previous week.
A speech by Christine Lagarde, the president of the European Central Bank (ECB), is scheduled for Tuesday.
An ECB forum panel featuring Lagarde, Andrew Bailey, Haruhiko Kuroda, and Jerome Powell will take place the following day.
On Tuesday, Powell will be joined by Treasury Secretary Janet Yellen to testify before the Senate Banking Committee. Thursday, Powell will testify in front of the House Financial Services Committee.
Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. He is a Member of the Chartered Financial Analyst Society.