Gold sinks to 9-month low as Fed remarks boost dollar, bond yields
Gold slumped to a near nine-month low on Friday and headed for a third straight weekly decline after Federal Reserve Chair Jerome Powell disappointed investors with his view on rising yields that pushed up the dollar and bond yields.
· Spot gold eased 0.2% to $1,693.79 per ounce by 0055 GMT, having earlier dropped to its lowest since June 8 at $1,688.96. It was down 2.3% for the week so far.
· U.S. gold futures dropped 0.6% to $1,691.20.
· Powell on Thursday repeated his pledge to keep credit loose and said although the rise in yields was “notable”, he did not consider it a “disorderly” move.
· The U.S. 10-year yield topped 1.5%, while the dollar surged to three-month highs. Higher yields increase the opportunity cost of holding bullion, which pays no interest.
· U.S. jobless claims rose last week after brutal winter storms in mid-February.
· The amount of gold held by exchange traded funds fell by 84.7 tonnes worth $4.6 billion in February, the World Gold Council (WGC) said.
· CME Group Inc decreased margins for COMEX 100 Gold Futures contracts by 9.1%.
· Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust fell 0.4% on Thursday.
· Silver rose 0.2% to $25.35 an ounce, but was down 5% for the week so far, its worst since late-November.
· Palladium climbed 0.2% to $2,343.55.
· Platinum shed 1.2% to $1,113.02.
· Gold remains under $1700 leading into the EU session
Gold closed another 0.80% lower in yesterday's session and this morning the yellow metal has only managed to pare 0.15% of that move but remains under $1700/oz.. Silver is in the red this morning although overnight found some support just ahead of the $25/oz level.
· Gold Price News and Forecast: XAU/USD targets $1672 support after Powell’s blow
Gold (XAU/USD) is on its way to test the June 2020 low at $1671, as the bears remain in control after Fed Chair Jerome Powell downplayed the recent turmoil in the bond market. Powell said that the recent bond market jitter "caught my attention", which disappointed markets and triggered a renewed uptick in the US dollar alongside the Treasury yields. Gold and stocks suffered thereafter.
· Gold Price Analysis: Technicals argue for weekly 50% mean reversion
As per the prior analysis during Federal Reserve's Jerome Powell's event, Gold Price Analysis: Bears back in play on Fed's Powell, eyeing $1,698, the price indeed melted to the target, printing a low of $1,686.40 and the verge of reaching the measured $1,685 target. At the time of writing, gold is trading at $1,692 and down some 0.3% and is trading in a bearish environment.
Reference: CNBC, FXStreet
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