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Gold prices suffered heavy losses at the last trading session of the week, hitting their lowest level in about three months, and recording the worst week since late November 2020.

Gold traders are going short on the precious metal over surging U.S. Treasury yields, which have put a dent in the non-yielding precious metal’s appeal.

At the time of drafting this report, Gold slumped by 0.60% at $1,764 per ounce.

READ: Gold’s appeal up thanks to a weaker U.S dollar

Recent price actions reveal that it is their lowest since November 30, 2020, as gold prices have plunged by 3% in the week to date.

The U.S. Treasury yields, gold’s arch-enemy, continued to tick upward after hitting a near one-year peak earlier in the week. The dollar also looked set to end the week with gains, inching up on Friday.

Usually, higher inflation boosts the price of the precious metal in principle but also helps U.S Treasury yields, which in turn helps the opportunity cost of holding the safe haven shinny asset.

READ: Gold prices up on U.S Central Bank’s will to keep interest rates low

In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on gold’s recent price action-reaction amid the surging U.S treasury yields, and the Euro, which often exhibits a positive correlation with the precious metal

“Gold continues to struggle under the weight of real US yields but getting a timely reprieve from the weaker US dollar. Otherwise, the yellow metal would be trading below $1750.

“The street continues to watch the EURUSD movements like hawks. A move above 1.21 could provide an Alka seltzer moment, while a shift back to the low 1.2000’s could be the harbinger of doom for gold.”

READ: Unknown whale moves $99.3 million worth of XRP

Bottom Line

Gold traders are not keen on going long, at least for the near term, on the bias that rising U.S Treasury yields see investors showing less interest in the yellow metal.

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