The price of gold plunged on Friday morning against the backdrop of rising yields on US government bonds.
The price of the April gold futures on the Comex dropped by 0.41% or $7.25, to $1,767.9 per troy ounce. Meanwhile, March silver futures shed 1.04% and posted $26.797 an ounce.
Recall that on Wednesday, the most actively traded gold futures formed a technical figure "death cross" for the first time since mid-2018. The 50-day moving average was then at $1,856.46, and the 200-day moving average was at $1,857. 67.
The death cross is formed when the 50-day moving average crosses below the 200-day moving average, signifying a transition from a long-term upward trend to a downward trend.
On Thursday, gold showed slight correctional growth but soon returned to negative dynamics. The main downward stimulus here was the growth in the yield on US government bonds. This provides significant support to the dollar and negatively affects the fate of gold, increasing its value for holders of alternative currency.
Investors also analyzed domestic statistics from the United States. According to data, initial applications for unemployment benefits increased to 861,000 last week. Such data became not only a four-week high but also another proof that Americans continue to lose their jobs amid the coronavirus pandemic.
Experts believe that gold has lost its attractiveness for investors. Another reason for the decline in the popularity of gold, according to analysts, is the strengthening of the position of bitcoin. Obviously, at the moment, there are more attractive alternatives to gold, and the only way to overcome the psychological mark of $1,800 is to normalize government bonds and the successful vaccination against COVID-19.