The US dollar and US government bond yields dominated the world gold price last week

Last week, fluctuations of the dollar and US government bond yields were considered to be the two main factors controlling the world gold market.

Gold bar at the gold exchange in Seoul, Korea. Photo: Yonhap / TTXVN According to FactSet data, for the whole week, the precious metal price is estimated to decrease by about 0.1%. In the first session of the week (April 19), gold prices went down after being traded at a much higher level than usual in the previous week. However, a weaker dollar and falling government bond yields have helped keep the metal from falling further. In the session of April 20, gold prices regained momentum, amid the decline in USD prices and US Treasury bond yields, increased demand for gold to preserve assets. This session, the dollar index fell 0.1% against major currencies after hitting a seven-week low, while the yield on 10-year US Treasury bonds fell 1.6%. Gold prices continued to increase by nearly 1% high in the session on April 21, when 10-year US bond yields fell below 1.6%, reducing the opportunity cost of holding gold and unprofitable assets. , while the dollar is at a low level. OANDA senior market analyst Edward Moya said gold prices have been adversely affected in the past few months due to rising bond yields, but now the precious metal price has increased quite a lot. Moya added that the global economic outlook is still volatile and investors will see more cautious measures in the next quarter. However, to the session of April 22, the gold price turned to decrease due to the strength of the USD. Edward Meir, an analyst at ED&F Man Capital Markets, said both the US dollar and 10 year US government bond yields rose, thereby putting pressure on gold prices. The dollar is up 0.2% against a basket of other major currencies, making gold more expensive for buyers holding other currencies. Meanwhile, the US 10-year government bond yields rose to their intraday high of 1.587%. Gold prices have fallen 6% this year so far, mainly due to pressure from the rise in US government bond yields. In the last session of the week (April 23), gold prices continued to decline, when positive data on the housing market boosted bond yields and reduced the attractiveness of this precious metal. According to statistics, new home sales in the US reached 1.021 million units in March, the highest level since 2006. Experts say this data is “heavy enough” to push yields higher and put pressure on gold prices. Specifically, the price of gold delivered in June decreased by 0.2% to $ 1,777.80 / ounce. Carsten Fritsch, an analyst at Commerzbank, said that in order for gold prices to skyrocket to $ 1,800 an ounce, the market needs to see a reversal of the capital flow of gold exchange funds. According to the analyst, the flow of gold out of ETFs has slowed down, with April averages reaching 1.5 tons, down from a corresponding nearly 6 tons in March. Mr. Fritsch forecasts that ETFs will increase their gold holdings and that the precious metal price will rise again in the second half of the year. In addition, some market analysts also believe that gold prices are likely to increase due to increased tensions between the US and Russia. Currently, investors are waiting for a policy meeting of the US Federal Reserve (Fed) expected to take place next week./.