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Gold futures were marginally lower Tuesday, attempting to hold ground after suffering its worst day in two months as it traded near levels last seen in mid-February.
Gold for June delivery
GC00,
GCM22,
was down $4.60, or 0.2%, at $1,859 an ounce after slumping 2.5% on Monday. May silver
SIK22,
rose 0.8% to $22.715 an ounce.
Gold, which had tested the $2,000 level in April before turning south, has suffered as U.S. Treasury yields surged to levels last seen in 2018, with real, or inflation-adjusted yields, flirting with positive territory. Rising yields can be a negative for nonyielding assets, like gold.
The dollar, meanwhile, has surged versus major rivals, sending the ICE U.S. Dollar Index
DXY,
a measure of the currency against a basket of six major rivals, toward 20-year highs. A stronger dollar can be a negative for commodities priced in the unit, making them more expensive to users of other currencies.
“Gold bulls are being carried out in a stretcher,” said Marios Hadjikyriacos, senior investment analyst at XM, in a note.
“The cumulative weight of positive real yields and a fired-up dollar has proven too much for the yellow metal, which cracked below the $1,860 region. The silver lining is that the drop hasn’t been dramatic considering the seismic moves in yields, with gold being one of the few assets that’s still trading higher for the year thanks to geopolitical stress.”
