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  • Gold drops 1% to hit the lowest since early December. 
  • The US dollar extends last week’s bounce, pushing gold lower. 
  • The greenback gains ground on rising US yields.

Gold is on the offer, with the dollar charting an oversold bounce alongside an uptick in Treasury yields. 

The safe-haven yellow metal is trading at $1,829 per ounce at press time, representing a 1% loss for the day. Prices fell to $1,817 a few minutes ago to hit the lowest level since Dec.2. 

Gold’s biggest nemesis, the dollar index, which tracks the greenback’s value against majors, jumped to more than two-week highs near 80.40 early today, extending the rebound from the multi-year low of 89.21 reached last Wednesday. 

The greenback looks to be tracking the US Treasury yields. The 10-year yield jumped more than 20 basis points to 1.12% lat week. Meanwhile, the yield curve, as represented by the spread between the 10- and two-year yields, steepened to the highest level since 2017. 

Besides, a rise in borrowing costs is considered bearish for gold, a zero-yielding inflation hedge. A continued rise in yields could have a bearing on equity markets, leading to a more substantial bounce in the US dollar. However, haven demand may restrict gold’s losses. 

Technical levels