Gold prices in European trading experienced another decline on Tuesday, nearly reaching a six-week low, as US 10-year treasury yields surged, putting downward pressure on the precious metal’s value.
Compounding this decline is the unease stemming from diminished actual demand in China, underscored by lackluster data that has amplified apprehensions regarding the growth trajectory and economic performance of the world’s largest consumer of gold.
Current Price Scenario
During today’s trading session, gold prices registered a 0.2% dip to $1,903 per ounce, momentarily reaching a session peak of $1,908. This follows a 0.4% drop recorded yesterday, marking the fifth loss in a span of six days. The value touched a nadir of $1,902 an ounce, reflecting the impact of a strengthening US dollar and soaring US treasury yields.
US Treasury Yields
US 10-year treasury yields witnessed a 0.7% increase on Tuesday, extending a series of gains over the past four sessions and ascending to a nine-month pinnacle of 4.223%. These gains have materialized amidst prevailing sentiments that the Federal Reserve will uphold historically low interest rates well into the year 2024.
SPDR Gold Trust and Reserves
Recent data from the SPDR Gold Trust reveals a decrease of 3.76 tonnes in gold holdings yesterday, marking the second consecutive decline. The total gold reserves now stand at 895.87 tonnes, marking the lowest level since January 2020.
The intricate interplay between the surge in US treasury yields, the evolving outlook for interest rates, and fluctuations in gold demand both in China and globally contribute to the current market dynamics. Gold’s response to these factors underscores the complex landscape shaping the precious metal’s trajectory.
