The price for the yellow metal has crossed the level at $1,341.
Gold goes down, suppressed by strengthening greenback
On Wednesday, gold slumped because elevated bond gains kept to their steepest values since 2011 and the USD index stood still sticking with its seven-week maximum.
December delivery gold futures GCZ8 declined by 0.1% hitting $1,190.30 an ounce, revisiting the one-week close of $1,188.60 reached Monday, prior to Tuesday’s moderate rebound. Moreover, December delivery silver futures SIZ8 lost 0.2% trading at $14.375 an ounce.
The USD index was intact sticking with 95.68. This year it has managed to gain 4%, contributing to a 9% sink for the yellow metal for the same period. The gain on the American 10-year Treasury note TMUBMUSD10Y headed north by 1.8 basis points ending up with 3.23%.
The yellow metal is trading steady in a narrow band because the evergreen buck rebounds from its seven-week maximum – support is still firm enough for the evergreen buck on the back of a sound American economy as well as hopes for steady interest-rate lifts by the key US bank, as some financial analysts pointed out.
The key US bank has already lifted interest rates three times this year. What’s more, the major bank is anticipated to have benchmark rates lifted a fourth time in December. Besides this, the Fed will most likely proceed with its gradual tightening next year, at least it’s follows from the bank’s own projections.
Due to the fact that precious commodities are often employed as a haven by market participants and they don’t provide yields, gold is vulnerable to a dive in a soaring-rate environment. The given climate also tends to back the evergreen buck, thus dimming the appeal of dollar-priced gold to traders who utilize other currencies. However, stock markets appear to be vulnerable to strengthening bond gains and any indication that equity markets are in fast retreat could potentially resume interest in the yellow commodity.
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