Gold slumped nearly 3 per cent in the past week, hitting its lowest levels of the year — the latest sign that investors are betting on continued U.S. growth and shrugging off trade tensions between the world’s two largest economies.
Gold’s prolonged retreat comes after months of rangebound trading that followed three straight quarterly gains. The recent slump is causing some bullish investors to wonder whether the haven metal’s years-long rebound might be coming to an end.
While gold stayed above $1,300 ($1,725 Canadian) a troy ounce for much of the year, investors are watching to see if further volatility pushes prices below Thursday’s close of $1,267.20.
With prices still well below 2011 records, some had anticipated that investor fears would push gold higher as investors flocked to safer assets. Instead, the metal has languished as economic-growth momentum has shifted to the U.S. and the Federal Reserve has continued to raise interest rates.
The metal’s weakness has coincided with the dollar reaching a near one-year high and the yield on the 2-year Treasury piercing 2.5 per cent for the first time since 2008.
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