HomeMarket NewsGold slumps below $1,900 to six-month low as dollar, Treasury yields surge

Gold slumps below $1,900 to six-month low as dollar, Treasury yields surge

Actionable Trade Ideas

always free

Gold prices falling in a bearish market. Red arrow going down over gold bullion bars. Concept digital 3D render.

hernan4429/iStock via Getty Images

Gold prices continue to decline, hitting a six-month low as the dollar strengthens and Treasury yields surge. Investors are seeking the safety of the dollar, causing gold to become more expensive for international buyers.

The ICE U.S. Dollar Index rose by 0.4%, nearing a trade value of 106.70, its highest level since November 30.

The price of Comex gold futures for September delivery, the front-month contract, fell by 1.5% to $1,871.60 per ounce. This marks the lowest settlement value since March 10. Likewise, the price of September silver futures dropped by 2% to $22.477 per ounce.

Notable decliners in the gold sector include Newmont, which saw a decline of 5.4%, AngloGold Ashanti at 8.6%, Harmony Gold at 5.6%, Gold Fields at 5.4%, Agnico Eagle Mines at 3.9%, and Barrick Gold at 3.7%, all listed on the S&P 500.

β€œAs long as the narrative remains that the Fed expects higher interest rates for a longer period of time, it will continue to exert pressure on precious metals,” stated TD Securities analyst Ryan McKay. He also noted that gold’s drop below the $1,900 per ounce level triggered technical selling.

Treasury yields on 2-, 10-, and 30-year bonds have all risen by more than a full percentage point each from their lows in 2023, closing at 5.142%, 4.625%, and 4.731% respectively.

On the other hand, gold continues to receive support from strong physical demand, particularly from central banks and China. However, the immediate focus is on the Federal Reserve’s stance on interest rates,” stated McKay.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.