Yahoo Finance Gold Prices Fall Sharply Near ‘Support Zone’ as Treasury Yields Soar
Investing.com – Gold prices eased from four-month highs as US yields rose sharply after strong growth data from China and amid expectations that inflation would soon gather pace.
Gold futures for February delivery on the Comex division of the New York Mercantile Exchange fell by $11.20, or 0.84%, to $1,327.90 a troy ounce.
Yields on United States 10-Year reached a ten-month high amid strong China economic growth data and rising expectations for faster inflation growth, which pressured gold prices to retreat from four-month highs.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
The fall in gold futures come amid comments from Macquarie warning that risk of a reversal in gold prices is rising, as it is “harder for gold to ignore the impressive snapback in real yields” since the turn of the year.
The bank said $1,320 to $1,325 is the support zone for gold prices, adding that the market will likely find buyers around these levels.
Despite the bank’s warning, traders remain bullish on the yellow metal as data last week showed they increased their bullish bets on gold for the fourth-straight week.
Speculative net long position in gold rose by 40,000 contracts to a net long 203,300 contracts, a six-week high, according to the most recent Commitment of Traders (COT) report.
In other precious metal trade, silver futures fell 1.29% to $16.95 a troy ounce, while platinum futures fell 0.42% to $1006.70.
Copper rose 0.34% to $3.20, while natural gas fell 2.41% to $3.16. Natural gas futures came under pressure despite an Energy Information Administration report showing natural gas storage levels fell more than expected.
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