Gold Prices Plummet to Seven-Week Low Amid Rising Yields and Dollar Strength
Gold prices have taken a hit in recent weeks, falling to a seven-week low of $4,111 an ounce. According to Vedika Narvekar, Research Analyst - Commodities & Currencies at Anand Rathi Shares and Stock Brokers, the bias for gold prices remains cautious due to yields and Fed policy.
The main culprit behind gold's decline is rising Treasury yields, which have been fueled by persistent inflation worries and a hawkish Federal Reserve. The 30-year yield has reached its highest level since 2002, while the 10-year yield is near its highest since 2007.
A firmer US dollar has also added to gold's woes, making it more expensive for foreign investors to purchase. However, despite falling prices, gold ETF holdings have continued to rise towards a multi-year high, indicating that investors remain bullish on the precious metal.