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Gold futures on Monday were under some selling pressure, taking cues from a rise in government bond yields, which can compete against bullion for those investors seeking the perceived safety of haven assets.
December gold
GCZ21,
was trading $5, or 0.3%, lower to reach $1,753.40 an ounce, following a 0.4% weekly advance.
The slide in bullion came even as the dollar, usually a key catalyst for precious metals priced in the currency, was trading lower. The U.S. dollar was down 0.3%, as gauged by the ICE U.S. Dollar Index
DXY,
A softer dollar can make dollar-pegged assets less expensive to overseas buyers; however, some strategists said that the rise in yields, including those adjusted for inflation, was creating a bigger headwind for gold and silver.
The 10-year Treasury note yields
TMUBMUSD10Y,
around 1.488% early Monday, compared with 1.464%. Treasury prices fall as yields rise.
“Meanwhile, gold prices are back under pressure as the new week gets underway, with a rebound in real U.S. yields overpowering the pullback in the dollar,” wrote Marios Hadjikyriacos, senior investment analyst at XM, in a daily note.
Richer yields can make bonds more attractive than precious metals, which don’t offer a coupon.
Silver for December delivery
SIZ21,
meanwhile, was trading 15 cents, or 0.7%, lower at $22.39 an ounce, following a 0.5% weekly gain put in on Friday.
