Rising Treasury Yields Tame Gold Bugs

The world’s Apex Bank recently affirmed it was keeping near-zero rates at least for long-term rates after it wrapped up a two-day monetary policy meeting held yesterday.

The U.S Fed Chief also pointed that the world’s largest economy was on track for its fastest expansion in nearly four-decade yet felt no urgent need in raising rates helped the bullion asset to break higher, before descending to $1,737 an ounce at the time of writing.

Recent price actions reveal bullion bears held their ground, around the $1,755 an ounce resistance area amid the rising U.S dollar and 10- year treasury yields coupled with the growing appeal for the flagship crypto especially among institutional investors.

Gold traders are currently focused on the next important support situated around the $1730 an ounce area, as such a breach below could mean more trouble for gold bugs and press more on the yellow metal to return to the bearish track again.

Market experts further anticipate the resumption of gold’s downtrend as major key monetary policy players become more optimistic about the U.S economy thereby signaling that gold is likely to break below the $1,700 an ounce price levels in the mid-term over rising U.S yields coupled with a vibrant American economy is expected to grow by 6.5% growth in 2021.

It’s fair to say the precious metal is currently facing some headwinds amid its relative bullish rally as U.S Treasury yields post their highest levels in 13 months and still breaks higher after being briefly held back by the U.S central bank dovish bias.

This could further mean a number of hedge funds triggering a sell-off in earnest on the expectation of a rebounding U.S economy, which could eventually move 10-year yields above 2.25 %.