On Monday morning in London, yellow metal lost some value amid rising inflationary concerns among global investors.
On Monday, the benchmark 10-year Treasury yield soared to 1.5904%. Meanwhile, the greenback, which usually moves in the opposite direction to gold, increased on Monday.
At the beginning of the week, the price settled below $1,770 an ounce, maintaining its stability below that price bracket, indicating that we may see further declines in the upcoming sessions, hoping to reach $1,735 an ounce, is the likely next target.
On an intraday basis, we will continue to suggest a bearish trend, noting that a breach of $1,770 and holding above it may lead to the price testing near $1,800 an ounce before attempting further declines.
As inflation risks mount, Bank of England Governor Andrew Bailey said on Sunday that the central bank is preparing an interest-rate hike as tapering in key markets is set to take place, weighing on gold prices.
Metal traders are blinking cautiously after a report showed China’s GDP grew at a slower-than-expected 0.2% quarter-on-quarter and 4.9% year-on-year in the third quarter of 2021.
Despite pockets of COVID19-related restrictions, consumer spending held steady, and auto sales declined for the fourth consecutive month.
However, gold bugs face headwinds as retail sales in the world’s second-largest economy increased 4.4% year-over-year in September and the unemployment rate remained at 4.9%, according to September’s data.
The prospects that the US Federal Reserve will announce the end of quantitative easing within the next few months are reducing the appeal of precious metals. Gold prices remain on the defensive as central banks expect gradual normalization of their monetary policies.
This article was originally posted on FX Empire