Rising Bonds Paves the Way for Gold

Since August of 2020, the price of gold has been declining until it stabilized around $1,730-1,740 an ounce, which is the level it currently holds. However, analysts are optimistic about the prospects for gold. Factors that now work against it, such as bond yields, could very soon turn in its favor.

Investors have taken note of the rise in 10-year US Treasury yields, which have reached 1.77%, their highest in 13 months. Besides, the short-term strength of the dollar allows them to bet on riskier assets.

All of this could once again highlight gold, an asset that lacks counterparty risk.

Many analysts believe that gold will recover to 1,900-2,000 dollars an ounce before the end of this year, before shooting towards new highs in early 2022.

Spot gold price was trading around $1740 per ounce at COMEX. Meanwhile, spot silver price was trading flat near $25.10 per ounce. 

The dollar was trading at a loss, making commodities cheaper for holders of other currencies, which could boost demand.

Copper Rises on Supply Concern

 

In the morning trading session, three-month copper on the London Metal Exchange was up 0.8% at $8,988 a tonne. Metal prices are down 6% since they hit $9,617 in March, a nine-and-a-half-year high. 

Guy Wolf, Marex’s global director of analysis, stated that copper prices have stabilized around $9,000, not $8,000. It suggests that the market is quite tight. 

Processing charges for converting copper concentrate to metal have plummeted due to global supply disruptions. Factories have had to accept lower rates to ensure they have enough raw material to keep their operations going.

Figures on Chinese imports and exports for March will be released on Friday. Both should see significant percentage increases.

Crude oil prices dropped with WTI price trading 0.5% down at $59.41 per barrel in the morning trade.