The gold price dropped on Thursday, 21 April 2022, establishing a rebound in the dollar and US Treasury yields, which weighed on the demand for safe bullion. Get an insight into the fundamentals through the sections below.
A Closer Look into the Matter
At present, US gold futures stand at $ 1,956.20, indicating a flat trend. Spot gold stood at $ 1,953.21 per ounce, down by 0.2% as of 0039 GMT.
US Treasury yields strengthened after falling from 3-year highs on 20 April 2022 as dip purchasers emerged. The United States Treasury Department witnessed steady demand for the sale of twenty-year bonds.
The dollar also solidified after it eased in the last session. This, in turn, made the greenback-based gold less alluring for the other currency holders. There has been a recovery in gold prices during the last session after dipping to an approximate 2-week low. This happened amidst worries of economic crisis due to the Russia-Ukraine crisis.
Russian troops aim to capture the steel plant of Mariupol in Ukraine on Thursday. The besieged city wishes to evacuate civilians and forces there.
The details mentioned above have been observed in the following events:
Bottom Line
Yields hiked on predictions that the Federal Reserve will raise rates of interest as inflation speeds up in 40 years. The higher yields and increasing interest rates in the USA greatly influence gold prices. This, in turn, raises the opportunity cost for keeping non-yielding currencies.
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Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.
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