Gold price plummets $100 this week as economic outlook remains grim, bitcoin competes for safe-haven status – by Anna Golubova (Kitco News – January 8, 2021)

(Kitco News) Gold tumbled around 4% on Friday as investors sold off the precious metal amid a rise in the U.S. Treasury yields market.

February Comex gold futures were last trading at $1,839.40, down 3.88% on the day after breaching a key $1,850 an ounce level.

“There are two catalysts right now that are causing gold to sell-off. Rise in bond yields and the economy looking in trouble. This is causing liquidation and flight to cash,” said Kitco Metals global trading director Peter Hug.

“The 10-year bond yield has climbed above 1.1%, which is a significant move in yields to the upside. This morning you also had employment data that was much more negative than expected, which indicates that the U.S. economy could be in trouble in Q1.”

The usual market reaction to bad economic news is a move into cash, Hug noted. “Commercials are getting out of gold and getting into cash, deploying into the equity market, or ten-year bond yields,” he said.

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