FX.co ★ Gold and bonds

Renewed vigor of dollar bulls, rising Treasury yields and growing investor optimism are putting strong pressure on the gold market.

In fact, according to Phillip Streible of Blue Line Futures, gold is at its lowest whenever bond yields are at its highest.

But in a survey conducted by Wall Street last week, three analysts said they will buy gold this week, while eight said the opposite. The last two, meanwhile, said they were neutral.

In terms of retail, 40% called for an increase in gold prices, while 44% predicted a fall. The remaining 16% were in favor of a sideways movement.

Noting the improving economic conditions, some market analysts believe that Treasury bonds will continue to rise, and that it would affect the decisions of the Federal Reserve.

But Fed Chairman Jerome Powell already said the central bank does not have immediate plans of changing the monetary policy, since bond yields are not enough reason for this.

Darin Newsom of Darin Newsom Analysis said this comment means that Treasury yields will continue to rise in the future, which will keep the pressure on gold.

Nevertheless, Ole Hansen of Saxo Bank said he remains bullish on gold, but in the short term.

Adrian Day of Adrian Day Asset Management also said the same thing, claiming that the current sell-off in gold is exaggerated.

As for Afshin Nabawi of MKS SA, he said he is neutral about gold, even if long-term fundamentals continue to support prices. According to him, a strong US dollar and high bond yields will dominate gold prices.

Meanwhile, Colin Cieszinski of SIA Wealth Management said gold will continue to fight, at least until inflation rises to a level that cannot be ignored. He also pointed out that commodities are growing in all directions, so inflation, penetrating consumer markets, will only be a matter of time.