Gold Price Slides Below 1800 Ignoring Declining US Yields

Gold price traded at $ 1803.23 on Thursday, July 22nd, down about 0.4% on the day after, falling from an $ 1813 peak to a $ 1794.66 low. However, the precious metal rebounded from lows as the US Dollar bounced off a three-month high, and the stock market rallied amid risk appetite.

SPY added 0.65%. However, players remain cautious amid concerns about inflation and the spread of the COVID-19 Delta strain.

In the middle of the New York session, the DXY, which reflects the value of the US currency against other major currencies, fell to 92.788. The daily peak was at the level of 93.191. A day earlier, the indicator had reached more than a 3-month peak.

Investor concerns about Delta and inflation are supporting the Dollar. However, due to high inflation rates in the United States, the Federal Reserve may relax stimulus, which hurts the price of gold.

Positions in the gold market

As noted by TD Securities, money managers have not significantly increased their long positions in gold, ignoring the decline in real yields in the United States.

According to experts, gold continues to struggle to strengthen its position, regardless of the extremely positive change in real yields for the precious metal, which has returned the value of 10-year bonds, protected from inflation to pandemic highs.

Meanwhile, the precious metal lacks the strength to break up the 200-day moving average. This reflects a clear divergence in capital flows.

According to ANZ Bank, regardless of the vaccination rollout, ANZ Bank said markets are not ready to cope with the coronavirus. There has now been a shift in sentiment towards the belief that expected growth and profits are exaggerated.

So, the idea of ​​bringing the global economy back to normal at the same time seems flawed, as it did at the beginning of last year, and bond dynamics are perfect for tracking market sentiment.

The yield on 10-year US government bonds again hit 1.12% this week and rebounded to 1.3%.

The dollar performed well despite lower yields. The American currency is strengthening both thanks to a decrease in risk appetite and positive economic data. However, yields fell across the board.

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