Photographer: Chris Ratcliffe / Bloomberg
Photographer: Chris Ratcliffe / Bloomberg
Gold fell to extend the biggest drop in two months amid the rise in the dollar, treasury yields and equities, while investors kept the promise of pres. Joe Biden weighs in on plans for major U.S. economic aid.
Bullion endured a downturn week when January was underway, with early gains reversed as a surge in treasury yields dampened the attractiveness of the non-interest-bearing asset. This came when the dollar recovered from its lowest level in almost three years. The S&P 500 set another record on Friday.
Gold made the biggest annual profit in a decade last year as the pandemic tore through the world economy, with central banks and governments stepping up the stimulus. With the introduction of vaccines, traders are weighing the outlook of the 2021 refuge, and evaluating the drivers, including the outlook for further massive support, shifts in inflation expectations and risk appetite.
Praying on Friday called for trillions of dollars in immediate further aid, including increased direct payments, after a surge in coronavirus cases dropped U.S. payrolls for the first time since April. He will present his proposals on Thursday before taking office on January 20.
The rise in yields is currently pouring cold water on gold, said Howie Lee, an economist at Oversea-Chinese Banking Corp. ‘Rising inflation expectations and higher yields are currently pulling gold in different directions and the latter seems to be prevalent. Gold may trend sideways for the time being, but rising inflation expectations are likely to increase gold later in the year. ”
Spot gold fell 1.7% to $ 1,817.49 an ounce, the lowest level since December 2, before comparing losses to $ 1,836.76 at 10:57 in Singapore. The price fell 3.4% on Friday, the highest since 9 November. Silver, platinum and palladium all fell as the Bloomberg Dollar Spot index rose 0.4%.
Meanwhile, the House in American politics will take a resolution this week on Donald Trump is accused of his actions to encourage the mob that stormed the Capitol, Speaker Nancy Pelosi said. At the same time, the president is planning a challenging last week in office, according to people familiar with the matter.