Gold price drops more than 0.60% on surging T-yields

The overall market sentiment on Monday is positive and rising US Treasury bond yields are boosting the US Dollar, driving the Gold Index, XAU/USD, downwards.

Gold price has retreated from around the daily $1935.51 highs and dropped below $1915 as US Treasury bond yields recover some ground and underpin the dollar, although market sentiment remains upbeat. Gold is trading at $1919.69 at the time of writing.

Therefore, the precious metal remains lackluster, and the XAU/USD exchanges hands at around $1914.49, down by more than 0.60%. Buoyant US Dollar and elevated US bond yields constitute the main drivers of Gold’s price

Factors like US Treasury bond yields advancing, particularly the 10-year benchmark note rate up three and a half bps, at 3.517%, is weighing on gold prices. Consequently, the dollar edges up 0.16%, as shown by the US Dollar Index, a measure of the buck’s value against a basket of peers, trading at 102.142, a headwind for XAU/USD.

Risk appetite improved, as shown by US equities opening in green territory bolstered by the lack of Fed officials speaking, due to the blackout period, ahead of the Federal Reserve’s Open Market Committee (FOMC) meeting on January 31 – February 1.