The world’s two leading safe havens are at odds with one another.
The US dollar’s muscle-flexing resulted in the tumbling of the gold price. Nevertheless, the fall is kept at a minimum with investors still weighing on the impact of the rise in the Treasury yields.
In the latest commodity charts, the gold futures shed off 0.03%, where the bullion steadied below the $1,900 threshold at $1,850.20 per ounce.
Moreover, the spot gold price is not performing any better and settled at $1,843.85 per ounce. The contract tumbled by 5.4% in the past four days of regular trading.
Just 12 days in on the new year, gold price struggles to maintain the momentum garnered in the previous year.
In 2020, it posted its biggest annual hike in the decade, buoyed by the rising appetite for inflation-hedge assets being a non-yielding commodity.
Benchmark Treasury yields continued to surge past 1% gain incurred during the previous week as traders prepare for the bigger stimulus measure under the Biden administration.
The new US leader and his administration are scheduled to assume their posts on January 20.
On the other hand, other precious metals are outperforming their previous settlements with silver gaining 0.7% for the day.
This stride is recorded despite the double whammy emerging from prospects of the bigger stimulus package and Treasury yields’ rise.
The foregoing usually consolidates downward pressure on the metal.
Silver settled at $24.70 per ounce despite the firming USD index which notched above the 90-point threshold during midday trading.
Consequently, platinum hiked by an impressive 2.3% followed by palladium which recorded a 0.7% hike for the day.
Volatile Environment Ignites Optimism
Currently, market spectators are keeping close monitoring on the webinar to be joined by the Federal Reserve’s Jerome Powell on Thursday.
The central bank’s monetary policy will remain as one of the biggest determinants of the price of the bullion and other metals.
Analysts noted that the Fed will continue adapting a dovish stance through 2023, at the very least, to support the United State’s tumbling economy.
Meanwhile, a new resolution targeted to impeach President Trump from office. This happened only eight days before the official relinquishing of political power, igniting concerns.
This is amid the riot that happened in Capitol Hill believed to have been started by his followers.
Similarly, the rising number of infections worldwide remains the biggest driver of the risk-off sentiment which is beneficial for the bullion.
Currently, the US cases hiked to 22.6 million with no end yet in sight despite the presence of the Covid-19 inoculation.