Monday ‘s rise in dollar and government bond yields came together to reduce desire for bullion, keeping prices near their lowest levels since early June, FactSet data shows.
The fall in the precious metal at the start of the second week in March comes even as a $ 1.9 trillion COVID-19 relief bill is due to be voted by the House as early as Tuesday after the Senate approved it. delivered to the relief package over the weekend. with discounts to accept centrist Democrats.
The fiscal package was expected to be an incentive for gold as it means more spending by the government, investing stronger in safe metals; however, the prospects for a clearer economic outlook at home and outside the U.S. may quantify near-term gold demand.
The background of the 10-year Treasury Department includes TMUBMUSD10Y,
trading at around 1.6%, and a firmer U.S. dollar, up around its highest level since November, as measured by the U.S. ICE Dollar Index DXY,
generating one-two punch for precious metals, metals dealers said.
Wealthier bond yields and stronger U.S. currency, in which many commodities are priced, can make bullion relatively as attractive in their own right to those buying overseas.
“Gold is still bidding below the $ 1,700 mark, but a further rise in U.S. output is likely to dampen bulls’ appetite for gold and keep the trend short. downside, ”Swissquote senior analyst Ipek Ozkardeskaya wrote in a recent note.
At the last check, gold for delivery in April on Comex GC00,
GCJ21,
trading $ 10.30, or 0.6%, lower at $ 1,688.20 an ounce, with trading prices for the most active contract ending at the lowest level since June 5th.
Gold prices last week maintained a 1.8% weekly decline.
May SI00 silver,
SIK21,
yields 12 cents, or 0.5%, to trade at $ 25.17 an ounce, after a 4.5% weekly slip.