Gold prices plummet as US yields and the dollar rise

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Gold futures were trading lower on Thursday as rising US bond yields and a firmer dollar created some barriers to bullion buying. “Gold is lower as the metal remains trapped in a trading range without breaking in either direction for now,” wrote Peter Cardillo, chief market strategist at Spartan Capital Securities.

The long-term outlook for the yellow metal among some traders is for higher prices, amid expectations for further government relief to fuel growth in virus-hit economies. President-elect Joe Biden is expected later Thursday to outline a $ 2 trillion tax spending package that would include more direct payments to American families and significant state and local funding. Long-term gold prices could rise against that backdrop, bullish investors say. However, buoyant US Treasury yields, competing with gold for safe haven demand, and a more cheerful dollar, as measured by the ICE US Dollar Index DXY, + 0.17% have weighed on the Gold prices, experts speculate. The 10-year Treasury yield was hovering around 1.10% on Thursday and had approached 1.19% earlier in the week. Gold and other precious metals do not offer coupons. Separately, the dollar was up 0.1% to around 90.47. A stronger dollar can make assets priced in the currency more expensive for traders abroad. In context, February gold prices GC00, -0.54% GCG21, -0.54% traded $ 12, or 0.6%, lower at $ 1,843.10 an ounce, following a 0.6% increase on Wednesday. Silver for March delivery SI00, -0.52% SIH21, -0.52%, meanwhile, was trading 19 cents, or 0.7%, lower at $ 25.41 an ounce. Meanwhile, initial weekly jobless claims in the United States rose by 181,000 to 965,000 seasonally adjusted in the seven days ending Jan. 9, the government said Thursday. The rise in the unemployment insurance reading to the highest level since August may support the case for additional stimulus, which could weigh on the gold trade.