Gold prices fall as US bond yields rise

  • 21 June, 2022
  • 3:19 pm EEST

Gold prices fell, during trading today, Tuesday, June 21, 2022, with the increase in US bond yields.

This comes in light of investors’ anticipation of the position of major central banks to raise interest rates to get a clearer view of bullion.


Gold Prices Today

The price of gold futures contracts – August delivery – decreased by 0.21%, to reach the level of $ 1834.70 an ounce.

The price of immediate delivery of the yellow metal also decreased by 0.19%, to reach $ 1835.20 an ounce, according to data seen by the Energy platform.

On the other hand, the price of silver futures contracts – July delivery – increased by 0.38%, at $21.63 an ounce.

The spot platinum price rose by 0.81%, at $938.25 an ounce, and the spot palladium price increased 1.04%, at $1851.58 an ounce.


Gold Market Situation

“The gold market is holding up, as policy makers – after a historic week for global central banks – will explain the reasoning behind their decisions this week,” said Stephen Innes, managing partner at SBI Asset Management.

A series of sudden measures by some of the world’s largest central banks to tackle hyperinflation has left bond investors in limbo.

A growing group of investors called on policy makers to move quickly to end the uncertainty in the markets.


Interest Rates

Federal Reserve Chairman Jerome Powell is set to testify in Washington, DC later this week, after the US central bank approved its largest interest rate hike in more than a quarter century, earlier this month.

Although bullion is often seen as a way to hedge against inflation, higher interest rates and bond yields increase the opportunity cost of holding gold, which doesn’t produce anything.

“While the street does not expect Powell to reinvent the wheel of policy, we can expect him to reinforce the idea that the Fed is in a data-driven position,” Innes said.

“Gold prices and all interest rate sensitive risk assets will be subject to major risks,” he added.


The Dollar And US Bonds

The dollar fell slightly, making bullion priced in dollars more attractive to buyers holding other currencies.

However, US 10-year Treasury yields rose, preventing any gains in gold.

Stephen Innes noted that risk-off sentiment is not supportive, as gold and stock markets are moving in tandem, however, further weakness combined with slower economic growth should enhance gold’s safe-haven appeal.






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