Gold prices rise 1% even when bond yields hit the highest level in a year

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Gold contracts traded on Comex rose on Monday, shaking up a surge in government bond yields and leading some traders to suggest that the defeated bullion may be attracting a similar demand for a safe-haven, as investors they seem momentarily shaken by rising borrowing costs across the country. the world. “Rising real rates accompanied by a firmer dollar would normally be a death sentence for the yellow metal, but bullion is rising on Monday, suggesting that it is behaving like a safe haven again,” wrote Marios Hadjikyriacos, XM investment analyst. on a daily note.

April gold GC00, + 1.05% GCJ21, + 1.06% on Monday rose $ 20.60, or 1.2%, to hit $ 1,797.90 an ounce, after Friday saw the sharpest weekly skid, a 2.5% drop, from the period ending January 8. Show FactSet data. Monday’s move came as the TMUBMUSD10Y 10-year Treasury note, 1.350% was yielding 1.35%, at the last check, and moving towards a psychologically important level at 1.40%. That jump in returns compared to the past two weeks has weighed on stocks, with the Dow Jones Industrial Average DJIA, -0.53% and the S&P 500 SPX Index, -0.69% weighted by the prospect of higher borrowing costs emerging. of the COVID-19 pandemic. Bond yields have been driven primarily by expectations that aggressive rounds of fiscal spending in addition to extraordinarily loose monetary policy from the Federal Reserve will at least stoke inflationary pressures in the short term. Commodity experts say expectations of stronger growth have boosted yields, but uncertainty about how it will affect stocks, seen as highly valued, has led investors to the perceived safety of bonds, particularly as that the public debt falls. “This rebound can be explained in correlation with stock indices in the red,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades, in a daily note. “From a technical point of view, the downtrend of the last few days is losing steam, but a proper investment would require a solid $ 1,800 rally,” the analyst wrote. Meanwhile, March silver SI00, + 0.76% SIH21, + 0.76% rose 26 cents, or nearly 0.9%, to $ 27.51 an ounce, after posting a slight weekly decline last week. .