ING strategists Warren Patterson and Ewa Manthey say Gold has extended its decline, trading near $4,500/oz as higher US Treasury yields and a stronger US Dollar (USD) weigh on non-yielding assets. They note that ETF holdings have fallen and speculative net length is at its lowest since February 2024, with the market focusing more on yields than on geopolitical risks.

Higher rates and USD weigh on Gold

"Gold extended its decline for a second straight session, with spot prices hovering near $4,500/oz yesterday, as US Treasury yields moved higher amid the rally in oil prices."

"Higher energy prices mean inflation concerns are only growing, suggesting that rates will remain higher than originally anticipated."

"This has weighed on non-yielding assets, such as gold. Meanwhile, the broader strength in the USD will only add further pressure."

"ETF holdings in gold have fallen by more than 2.2% since the start of hostilities in the Persian Gulf, while the managed money net long in COMEX gold is at its lowest level since February 2024."

"For now, the gold market appears less focused on the lingering geopolitical risk and more on rising Treasury yields."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)