Gold Prices Are Cheaper After US Treasury Yields Rise

Gold Prices Are Cheaper After US Treasury Yields Rise

global.gerbangindonesia.org – Gold Prices Are Cheaper After US Treasury Yields Rise

Gold prices fell on Monday as US Treasury yields rose on expectations of a rate hike, with higher risk appetite amid hopes of peace between Russia and Ukraine reducing gold’s safe-haven appeal further.

Quoted from CNBC, Tuesday (15/3/2022), the price of gold in the spot market fell almost 1.6 percent to USD 1,953.40 per ounce. US gold futures fell 1.5 percent to $1,955.8 an ounce.

“One of the main reasons is soaring treasury yields. Markets also seem to be pricing in the FOMC meeting on Wednesday at which the Fed may start to start a tightening cycle. So, this is a negative factor for gold,” said Margaret Yang, strategist at DailyFX.

“Given the fact that both sides are willing to talk, I think the worst of the Ukraine crisis may be behind us. It is unlikely that gold prices will surge past previous highs from last week or hit record highs any time soon.”

The benchmark 10-year US Treasury yield hit 2.09 percent early Monday, its highest point since July 2019, as the US Federal Reserve is widely expected to raise interest rates by a quarter of a percentage point in a two-day event this weekend.

Stock Market Strengthening

Gold Prices Are Cheaper After US Treasury Yields Rise

Gold is highly sensitive to rising US interest rates, which increases the opportunity cost of holding non-yielding bullion.

Suppressing demand for safe-haven gold, global stocks rallied on Monday on hopes of a respite in the Ukraine crisis even as the battle rages on.

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