Gold slipped to its lowest in over two months on Wednesday as surging US Treasury yields and a firmer dollar continued to take a toll on the metal. Spot gold was down 0.2 per cent at $1,790.90 per ounce by 1244 GMT, having hit its lowest since December 1 at $1,782.40 earlier in the day after dropping 1.3 per cent in the previous session. US gold futures fell 0.5 per cent to $1,789.70.
“Gold markets seem to be fixated on U.S. yields,” Natixis analyst Bernard Dahdah said. “While there is an amazing amount of liquidity, we are going out of lockdowns and we are expecting growth to go back to normal levels,” he added, noting that given such optimism investors had little interest in the safe-haven metal. Growing expectations for inflation spurred benchmark U.S. Treasury yields to their highest since late February 2020. The surge in yields, in turn, prompted the dollar to rebound from a three-week low, further pressuring gold.
Breakeven inflation, a measure of expected…