21.04.202113:53 Forex Analysis & Reviews: Gold rises on the collapse of the dollar and treasury bonds

According to trading data, on Wednesday, the price of the leading precious metal increases against the background of a cheaper US currency and lower yields on US treasury bonds. However, despite the long-awaited positive dynamics, gold prices still cannot recover the losses incurred the day before.

Thus, the price of the June futures for the main precious metal on the New York Stock Exchange Comex rose by 0.21% to $ 1,782.15 per troy ounce. The May silver contract gained 0.26% and reported a price level of $ 25,907 per ounce.

As a reminder, at the close of trading on Tuesday, June gold futures on the COMEX commodity exchange rose by 0.4% to $ 1,778.40 per ounce, following a fall of 0.5% a day earlier. Last Friday, contracts reported the highest level since the end of February 2021.

As for May silver futures, they were virtually unchanged and closed at $ 25.84 an ounce after a spectacular 1% drop on Monday. May copper contracts sank 0.6% to $ 4.21 a pound, July platinum futures lost 0.9% to settle at $1,196.30 an ounce, and June palladium contracts fell 2% to $ 2,757.40 an ounce.

Meanwhile, the dollar index is significantly sagging for the third week in a row and at the moment has fallen to the level of 91.25 points, although in early April, this indicator was above the level of 93 points. Traditionally, the weakening of the main US currency supports gold prices, and the metal becomes more accessible to holders of similar currencies.

An additional upward factor for gold today is the strengthening of global uncertainty against the background of the COVID-19 pandemic. At the moment, the most disturbing news comes from India (it ranks second in the world in the number of infections), where the daily increase in cases of coronavirus has already broken through the 250,000 mark. The situation is no less frightening in the Asian region, especially in Japan. Due to the acute epidemiological situation around the world, gold now acts as a more reliable asset.

The main precious metal is also supported by data on the yield of 10-year treasury bonds, which fell to the level of 1.56%. The drop in this indicator may lead to an increase in investment demand for precious metals denominated in the national currency of the United States for foreign buyers.

Experts say that in the short term, the price of gold will be vulnerable to the risk of a decline in demand from India and rising interest rates in the United States. However, a weak dollar can compensate for these losses. At the same time, analysts emphasize that gold imports to China have reached a 14-year high today.