Gold Advances But Stays Within $ 1,800, Wary Of Bond Yields By Investing.com

© Reuters.

By Barani Krishnan Investing.com – Gold prices rose for the second time in three days on Wednesday, but the rally was limited to median levels of $ 1,800 as bidders eyed the gold bond market suspiciously. USA for fear of other damaging returns. spike. the New York Comex closed up $ 10.70, or 0.6%, at $ 1,854.90 an ounce after an intraday high of $ 1,862.70. Yield in it slipped for the second day in a row, slipping a cumulative 2.6 percent for this week, following last week’s 22% jump to March highs. The yield itself was at 1.09 on Wednesday, up from this week’s high of 1.187. The drop in yields came amid market talks that the Federal Reserve might not resort to a faster-than-expected drawdown from Covid-19 stimulus efforts. Such a reduction could have put pressure on the Fed to raise interest rates, now close to zero, faster than expected. Last week’s unexpected rebound in yields, coupled with a rally in the battered US dollar, led to a 3% drop in gold futures for the week ending January 8, down from highs above $ 1,960. Despite the drop in yields on Wednesday, the price remained strong, limiting the recovery of gold. Those long on the yellow metal also appeared restrained by concerns that the 10-year note could generate another resurgent performance later in the week. “Fed policymakers have eased concerns about a tantrum that has lowered yields and, in turn, pressure on gold prices,” said Craig Erlam, analyst at OANDA New York. “Whether that will lead to a sustained decline in yields or not is another matter. A decline below 1% in the 10 years could be a positive sign for gold, which has a lot of lost ground to make up after it crashed last week. ”

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