Gold prices tumble 2% as 10-year Treasury surges above 1.75% and dollar rises

Gold prices tumble 2% as 10-year Treasury surges above 1.75% and dollar rises

Gold futures were hit Tuesday by rising bond yields and a rising U.S. dollar as coronavirus vaccine rollouts lift expectations for higher inflation as economies recover, particularly in the U.S.

"The fresh leg high in yields is hitting demand for nonyielding Gold hard,“ wrote Sophie Griffiths, market analyst at Oanda U.K., in a research note.

"We have seen signs of the reflation trade questioning the Fed's ability to keep interest rates at current ultra-low levels,“ the strategist wrote.

Griffiths says that gold falling below $1,700 puts a multimonth low at around $1,680 in place.

At last check, Gold for April delivery

GCJ21, -1.54%

GC00, -1.56%

was down $34.20, or 2%, at $1,680.30 an ounce on Comex, after shedding 1.2% in the previous session. Prices based on the most-active contract were trading around their lowest since March 8.

Gains in the 10-year Treasury yield

TMUBMUSD10Y, 1.755%

at 1.76% have been credited with weighing on appetite for precious metals, which don't offer a coupon.

Meanwhile, the dollar has been perkier amid prospects of a stronger economic