Gold Dropped Amid Jump in the Dollar and Elevated US Treasury Yields – Investing.com India

Gold Dropped Amid Jump in the Dollar and Elevated US Treasury Yields – Investing.com India

yesterday settled down by -0.8% at 47716 as safe-haven buying driven by a surge in Covid infections was countered by a jump in the US dollar and elevated US Treasury yields. Investors remain optimistic that Omicron would not derail the economic recovery as many governments stop short of lockdowns as the number of deaths and hospitalizations from the new variant are comparatively low. Higher yields raise the opportunity cost of holding the non-interest paying gold, reducing its appeal. A higher dollar also makes gold more expensive for buyers holding other currencies.  
 
Meanwhile, geopolitical uncertainties on the Ukraine border provided a floor to the safe haven metal, as the US pledged to “respond decisively” if Russia invades Ukraine. Gold suffered its biggest annual loss since 2015, as a strong post-pandemic economic recovery and persistently high inflation prompted major central banks to tighten monetary settings earlier than anticipated. Looking ahead, rising US interest rates and slowing US inflation throughout 2022 is likely to weigh on gold. Gold discounts in India widened to the highest level in five months as consumers in major Asian countries held back purchases into the year-end holidays as new virus-related restrictions were imposed. Dealers were offering a