Gold
MARKET VIEW
Weekly changes: XAUUSD -1.59
After slow-burn over the past two weeks, gold found support at the level of 1,700. The precious metal has its worst first quarter in almost four decades.
The decline comes as higher yields dent the appeal of gold, which offers no interest. The strong dollar sank gold prices to a nine-month low as investors sold the precious metal to reduce the opportunity cost of holding the non-yielding asset.
KEY POINTS
The optimism that the rollout of Covid-19 vaccines will drive a global recovery has pushed investors to switch from the traditional haven gold to other assets.
Federal Reserve Chair Jerome Powell stopped short of forcefully pushing back against the recent surge in long-term borrowing costs, sending U.S. Treasury yields soaring.
The adoption by the Senate of President Joseph Biden's 1.9 trillion USD coronavirus relief bill, which should hand the U.S. a larger budget deficit and higher debt-to-GDP ratio — both is good for gold.
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