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Gold drifts away from a two-week minimum
On Tuesday, gold managed to retreat from a two-week low, although the commodity’s further surge is affected the appreciation of the greenback.
June delivery gold futures rallied 0.29% on the Comex coming up with an outcome of $1328.0 per troy ounce.
On Monday, gold prices headed south by 0.64% to a minimum of two weeks, which accounted for $1323.80.
Gold remains under pressure due to the fact that the greenback has been sticking with the maximum for seven weeks versus the basket of other key currencies in the face of ascending yield on American Treasury bonds.
The index of the American currency, appreciating the purchasing power of the greenback to the pack of six leading currencies, inched up to 90.84 today, showing the highest outcome since March 1.
The appreciation of the American currency makes gold, traded in the evergreen buck, more costly for keepers of other assets.
On Monday, the revenue of 10-year government bonds reached 2.998% after the outlook for inflation was combined with the forecasts about accelerating the rate of the key US bank’s interest rate lift.
At the time of writing, the revenue n US ten-year bonds decreased a bit and was accounted for about 2.957%.
An increase in the interest rate provokes a decline in gold: when the cost of borrowed funds is going up, it is difficult for gold to take on assets with high yield.
The demand for gold has traditionally been soaring in times of political or economic instability. With firm investor confidence, gold heads south, which was the case in recent trading sessions amid weakening geopolitical risks as well as tensions in international trade.
As for other metals, silver futures gained 0.47% being worth $16.66 a troy ounce. Platinum futures declined 0.11% reaching $921.40.
Copper futures inched up 0.95% being worth $3.14 per pound.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.