Followers | 679 |
Posts | 141164 |
Boards Moderated | 36 |
Alias Born | 03/10/2004 |
Tuesday, March 02, 2021 3:57:26 PM
By: Financial Times | March 2, 2021
• Exchange traded funds tracking the metal sustain biggest outflows in a year
Gold prices hit the lowest level in more than eight months on Tuesday as signs of a global economic recovery and rising bond yields dent the appeal of the precious metal.
The price of gold fell to a low of $1,707 a troy ounce, down 18 per cent from a high of $2,072 in August, as investors cut their holdings of the metal that is typically considered a haven asset.
Holdings in gold-backed exchange traded funds, products that offer exposure to gold but can be bought and sold like a stock, fell by 14 tonnes on Monday, the biggest outflow seen this year, according to Commerzbank.
Gold has been hit by a rally in global stock markets and expectations of continued stimulus measures from global central banks as economies recover from the heavy toll of Covid-19.
Gold does not provide streams of interest payments, so it tends to perform poorly as yields rise on other assets such as bonds. US real yields, which are adjusted for inflation expectations, have risen recently as investors expect President Joe Biden’s $1.9tn coronavirus stimulus package will stoke stronger US price growth.
“We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.
Carsten Fritsch, an analyst at Commerzbank, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.
At the same time, gold is facing more competition from cryptocurrencies such as bitcoin that some investors consider to be a hedge against inflation, according to analysts at Citigroup. The price of bitcoin has rallied 55 per cent this year to $49,000.
Still, the weaker gold price could lead to a pick-up in physical gold demand in the largest consuming countries of India and China, according to analysts. Last year, demand for gold fell to an 11-year low, according to the World Gold Council, led by a slowdown in jewellery sales.
Goldman Sachs said the price of gold is close to its pre-pandemic level in non-US dollar currencies. In addition, the price of gold in China — the world’s largest gold consumer — is higher than the global market, which could stimulate imports of gold.
For investors, the pace of any rise in inflation is likely to be key to gold’s fortunes. If inflation rises more than expected, that could boost gold’s appeal, since the metal is seen as a hedge against inflation.
Jeffrey Currie, an analyst at Goldman Sachs, said investors could shift from bonds into gold if “the focus around inflation overshoot risks increases”.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
• DiscoverGold
Recent GDX News
- YieldMax GDXY Name Change • GlobeNewswire Inc. • 01/25/2024 04:22:00 PM
- Surging S&P 500 Breadth • ValueWalk • 07/19/2023 03:16:37 PM
- S&P 500 Corrects In Breadth • ValueWalk • 07/18/2023 03:08:49 PM
- If The USDX Fell So Much, Why Didn’t Gold Truly Soar? • ValueWalk • 07/17/2023 05:16:20 PM
- USD’s Decline That’s… Bearish For Gold?! • ValueWalk • 07/12/2023 02:38:08 PM
- S&P 500 Late Day Reversal Worry • ValueWalk • 07/10/2023 03:17:34 PM
- Massive Gaming Celebrates Global Launch of House of Blackjack with USDC Earning Race • ValueWalk • 07/10/2023 02:44:17 PM
- Breathers In Mining Stocks Are Not Real Rallies • ValueWalk • 07/06/2023 05:20:55 PM
- S&P 500 Character Changes • ValueWalk • 07/06/2023 03:10:06 PM
- S&P 500 – As Bullish As It Gets • ValueWalk • 07/03/2023 04:01:21 PM
- The Great Gold Migration: How Asia Is Dominating The Global Gold Landscape • ValueWalk • 06/30/2023 05:07:35 PM
- S&P 500 Dip Buying And Tame PCE • ValueWalk • 06/30/2023 03:34:13 PM
- The Bullish Reversal In Gold Is Coming • ValueWalk • 06/29/2023 04:00:44 PM
- Insufficient S&P 500 Rotations • ValueWalk • 06/27/2023 02:41:42 PM
- Failing S&P 500 Rotations • ValueWalk • 06/23/2023 03:09:19 PM
- Countdown to S&P 500 Downleg • ValueWalk • 06/19/2023 01:49:20 PM
- Now THAT Was The Game-Changer For The Price Of Gold! • ValueWalk • 06/15/2023 04:40:35 PM
- S&P 500 Manages To Recover Initial Decline • ValueWalk • 06/15/2023 03:30:07 PM
- S&P 500 Manages To Recover From Tech-Driven Decline • ValueWalk • 06/15/2023 03:30:07 PM
- S&P 500 Withstands The Initial Selling – No Hike Tomorrow • ValueWalk • 06/13/2023 03:15:19 PM
- Roadmap For Mining Stocks – Courtesy Of The Stock Market • ValueWalk • 06/06/2023 03:17:49 PM
- Stocks To Still Extend S&P 500 Upswing • ValueWalk • 06/05/2023 03:31:02 PM
- AI, Stocks, And Gold Stocks – Connected After All • ValueWalk • 05/31/2023 03:29:15 PM
- Could Gold Miners Finally Stop Sliding?! • ValueWalk • 05/26/2023 08:42:37 PM
- S&P 500 Fine Selling Initiative • ValueWalk • 05/24/2023 03:06:00 PM
VAYK Discloses Strategic Conversation on Potential Acquisition of $4 Million Home Service Business • VAYK • May 9, 2024 9:00 AM
Bantec's Howco Awarded $4.19 Million Dollar U.S. Department of Defense Contract • BANT • May 8, 2024 10:00 AM
Element79 Gold Corp Successfully Closes Maverick Springs Option Agreement • ELEM • May 8, 2024 9:05 AM
Kona Gold Beverages, Inc. Achieves April Revenues Exceeding $586,000 • KGKG • May 8, 2024 8:30 AM
Epazz plans to spin off Galaxy Batteries Inc. • EPAZ • May 8, 2024 7:05 AM
Moon Equity Holdings, Corp. Announces Acquisition of Wikolo, Inc. • MONI • May 7, 2024 9:48 AM