Gold prices fell today to their lowest level in more than two weeks, as they were pressured by the strength of the dollar and US Treasury yields, with expectations of a rapid economic improvement.
Gold, which is considered a safe store of value in times of economic turmoil, is affected by rising bond yields as they increase the opportunity cost of holding gold, which yields no return.
Gold fell in the spot market 0.3 percent to 1,706.43 dollars an ounce, by 05:25 GMT. And earlier in the session, gold touched 1,704 dollars, the lowest level since March 12th.
While gold fell in trading in the futures market in the United States 0.4 percent to 1707.30 dollars an ounce.
“The main factor pressing on gold prices is the continued rise in US long-term bond yields,” said Margaret Yang, a strategic analyst at the Daily Fix.
It added that there is a continuous decline in the prices of the yellow metal, although it is supposed to rise as a hedge against inflation.
The pressure on gold was increased by the rise of the dollar to its highest level in a year against the yen today, due to investor concerns about the possible consequences of the collapse of the hedge fund “Archigus Capital”.