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Gold prices fell today as the dollar held on to the gains it achieved in the previous session on the back of a rise in US Treasury yields, while the safe-haven metal was under heavy pressure due to the Fed’s expectations of a strong economic recovery.
In spot trading, gold fell 0.2% to $ 1733.74 an ounce in Asian hours, after reaching a two-week high of $ 1755.25 on Thursday.
US gold futures fell 0.1% to $ 1731.50 per ounce.
“The dollar is responding to higher yields as it normally does, but it is also reacting to a stronger US economic situation which appears to be improving at a faster pace,” said Stephen Ince, chief global market strategist at Axi Financial Services, “If the economy gets stronger and there is still no inflation, that is bad news for gold.”
The dollar index rebounded from its lowest level in two weeks, supported by higher returns, which held close to the highest level in more than a year, reducing the attractiveness of the non-yielding yellow metal.
Yields jumped as the Federal Open Market Committee (FOMC) pledged to push ahead with strong monetary stimulus, saying that high inflation in the near term would be temporary in light of expectations of the strongest economic growth in the United States in nearly 40 years.
As for other precious metals, silver settled at $ 26.04 an ounce, and platinum fell 0.2% to $ 1204.62.
