Gold prices rise with the weakness of the dollar and the decline in US bond yields

  • 28 October, 2021
  • 3:25 pm EEST

Gold prices rose in trading today, Thursday, and settled above $ 1,800, supported by the weakness of the dollar and the decline in US bond yields.

This comes in conjunction with investors awaiting the meetings of a number of central banks to obtain clues on whether there is a tendency to tighten monetary policy earlier than expected.

Gold Prices Today

By 08:30 AM GMT (11:30 AM GMT), the gold futures contract for December delivery rose 0.28%, to $1,803.30 an ounce.

The spot price of the yellow metal also rose by 0.28%, recording $1801.53 an ounce.
At the same time, the price of silver futures contracts – for December delivery – rose by about 0.06%, to reach $24.21 an ounce.

The spot platinum price rose by 0.45%, to record $ 1017.64 an ounce, and the spot palladium price declined by 1.15%, to reach $ 1986.39 an ounce.

US Bond

This comes as US 10-year Treasury yields are near their lowest level in two weeks; This reduces the opportunity cost of holding non-yielding bullion.

Investors’ focus shifted to the Bank of Japan and European Central Bank meetings expected later today.

Both central banks are expected to keep their policy unchanged, with the European Central Bank likely to back down from expectations of a rate hike next year.

Market participants are also awaiting the US Federal Reserve’s policy meeting on November 3rd.

Fed officials are facing the clock in their ability to shrug off high inflation and are now toggling between their own senses of patience and risk; The US economy is in a tight spot with intertwined supply chains, sluggish employment and strong consumer demand.

Gold Demand

For its part, the World Gold Council said, today, Thursday, that global demand for gold fell in the third quarter to its lowest level since the last quarter of 2020 as financial investors sold the metal.

However; Demand from jewelers, central banks and smaller individual investors buying gold bars and coins has been strong, the World Gold Council said.

In its latest quarterly report, the World Gold Council said total demand for gold during the July-September period amounted to 831 tons, down from 894.4 tons in the same period last year and 1084.9 tons in the third quarter of 2019.

Central banks halted purchases as the virus spread, stores closed and jobs were lost; This caused a drop in jewelry sales, particularly in Asia, but the threat of economic damage led to a huge build-up of investors, especially in the West.

Central bank and jewelry demand partially recovered as economies recovered; Small investors are buying at a faster rate than they were before the pandemic, but large investors have been volatile.

Analysts expect jewelry demand to continue to exceed last year’s levels, but investment demand in total will be weaker in 2021, despite healthy demand for bar and coins.

Analysts forecast demand from jewelers at 1,700-1,800 tons for 2021, which would compare to 1,401 tons in 2020 and 2,123 tons in 2019.


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