The 10-Year U.S. Treasury yield spiking above long-term resistance at 1.50% on Thursday for the first time in a year, forced gold prices back down to recent lows at $1,765.
U.S. bond yields have tripled since August of 2020, which has been the main culprit in pressuring the gold price to correct 16% from its all-time high of $2089 since then.
The “flash spike” in 10-year Treasury yields on Thursday worried investors and caused the major U.S. indexes to reverse Wednesday’s large gains and fall into the red.
The 10-year Treasury spiked to 1.6% unexpectedly before falling to 1.5%, marking its highest level since last February. The Nasdaq experienced a -3.52% decline in daily trading after losing over 470 points, which marks its lowest level since October 2020.
When testifying before congress earlier this week, Federal Reserve Chairman Jerome Powell shrugged off the surge in longer-term U.S. government bond yields as a sign of growing optimism about the economy, which could pick up steam as more people are vaccinated against the coronavirus.
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