Last week, the price of gold dropped significantly, decreasing from a more than two-week high as bullion continues to lose its appeal as well as its value, with the value of the dollar climbing steadily and the U.S. Treasury yields increasing. Meanwhile, the U.S. gold futures for April delivery remained stable at $1,728.80/ounce while spot gold declined to $1,728.96/ounce by midday EST, which is roughly a 1.1% drop.
On the other hand, zinc dropped to $2,792 per metric ton, a 1.2% decline while palladium surged by nearly 7%, the biggest increase since May 2020. Other metals, such as tin, advanced while copper also dropped, pacing declines among other base metals traded in London.
Before this, spot gold had increased to $1,748.59/ounce by 3:40 on EST on Wednesday of last week, which is a 1% increase while gold futures also grew to $1,747.60 an ounce in New York. By early afternoon, over 20 million ounces of gold, worth $35 billion, had been traded.
At the same time, the benchmark U.S. 10-year Treasury yield increased to 1.74% for the first time since the start of last year, which helped boost the value of the dollar from a two-week low.
On Wednesday, the U.S. Federal Reserve stated that the economy of the United States was on course for its quickest expansion in almost four decades, adding that the central bank had vowed to not change its monetary policy stance, even with many expecting inflationary pressure. This news helped limit the persistent rise in bond rates, albeit briefly. The increase in bond rates has been mounting pressure on non-interest-bearing gold in 2021.
In a statement addressed to Bloomberg, the head of commodity strategy at Saxo Bank A/S Ole Hansen stated that despite the expectations for higher inflation as the Federal Reserve permitted the economy to run “red hot, gold traded at a lower price as yields continue to increase.
Hansen added that the Fed permitting inflation to grow should be able to support a reverse, noting that first, however, the price of gold needed to be scaled to $1,765 per ounce as it had become a level that many observed.
Concurrently, holdings in exchange-traded funds (“ETFs”) have decreased in every season since mid-February, making it the longest drop on record. A currency strategist at DailyFX, Ilya Spivak, revealed to Reuters that the Fed was becoming more optimistic, which did not bode well for gold, and this shows that the decline may likely continue.
Given that gold’s price had scaled record highs, mining giants such as GoldHaven Resources Corp. (CSE: GOH) (OTCQB: GHVNF) are unlikely to be shaken by this recent decline in price triggered by the action of the Fed.
NOTE TO INVESTORS: The latest news and updates relating to GoldHaven Resources Corp. (CSE: GOH) (OTCQB: GHVNF) are available in the company’s newsroom at http://ibn.fm/GHVNF
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