Gold Price Forecast: XAU/USD under pressure amid surging bond yields – Commerzbank
28.03.2022, 09:19

Gold Price Forecast: XAU/USD under pressure amid surging bond yields – Commerzbank

Gold price is weaker as the new week gets underway. Surging US Treasury bond yields and the dollar on the front foot are dragging down the yellow metal, economists at Comemrzbank report.

Rising interest rate expectations weigh on gold

“Gold fell sharply to start the week. We attribute this on the one hand to the US dollar, which is continuing to appreciate. And on the other hand, bond yields are climbing further.” 

“We believe the rise in yields and thus the increase in real interest rates are due to the higher interest rate expectations of market participants. The Fed Fund Futures are meanwhile pricing in rate hikes of 90 basis points at the next two meetings of the US Federal Reserve. In our view the gold price is holding its own impressively well against this backdrop.”

“ETF investors have also not allowed themselves to be deterred as yet: the gold ETFs tracked by Bloomberg registered inflows of 43 tons last week – already their tenth weekly inflow in succession. By contrast, speculative financial investors have withdrawn further from gold, according to the CFTC’s statistics: they slashed their net long positions by 9% to a six-week low in the week to 22 March.”

 

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