Gold slides on high US Treasury yields, easing global tensions
But falling world stocks limited losses, and analysts predict good news for gold from rising inflation, returning geopolitical risk and dollar weakness
London — Gold hit a two-week low on Monday, as investors piled into the dollar with US Treasury yields approaching 3% and geopolitical tensions eased. The yield on 10-year US Treasuries hit its highest since January 2014, lifting the dollar index to a seven-week peak and making dollar-priced gold costlier holders of other currencies. "If we break above (3%) it will be first time in five years this has happened and this increases opportunity cost of holding (non-yielding) gold," said Mitsubishi analyst Jonathan Butler. But he said the reason yields were rallying was because interest rates were expected to climb due to rising inflation. "If inflation is rising, gold provides a hedge," he said. Butler said he saw longer-term upside risk for gold from rising inflation, returning geopolitical tensions and a US currency stuck in a long-term downtrend as central banks around the world begin raising rates. Spot gold was down 0.5% at $1,327.93 an ounce at 10.05am GMT, after earlier touching ...
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