Gold price rebounded above the $1,700 level on Tuesday, as it gained respite from a retreat in US Treasury yields and the dollar following a slide to a 10-month low in the last session.
Spot gold rose 1.8% to $1,714.89 per ounce by 11:25 a.m. EST, but was still trading near its lowest since early June 2020. US gold gained 2.1% to $1,713.70 per ounce in New York.
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鈥淕iven the metal鈥檚 zero-yielding nature, falling yields may provide a tailwind for bulls to elevate prices higher,鈥� Lukman Otunuga, senior research analyst at FXTM, .
But while gold may extend gains near term, 鈥渇undamentally, the pendulum swings in favour of bears, especially when factoring in how global sentiment is improving on vaccine rollouts and covid-19 cases are falling globally,鈥� Otunuga added.
Gold鈥檚 current move 鈥渋s a short-term bounce and not a reversal of the bigger trend,鈥� said analyst Xiao Fu at Bank of China International. The exchange-traded fund outflows are indicating diminishing investor interest, she added.
On Monday, holdings of the world鈥檚 largest gold-backed ETF, SPDR Gold Trust, fell to their lowest since April 2020.
(With files from Reuters)