Gold futures headed higher Monday to start the month of March with a gain, as pause in the rise of U.S. Treasury yields prompted prices for the metal to stage a partial rebound in the wake of four consecutive session declines.
Gold has found support from heavy bargain hunting as well as a pause in the bond selloff, Adrian Ash, director of research at BullionVault, told MarketWatch.
Bond prices move inversely to yields. The recent surge in bond yields has knocked gold down to very attractive levels for the big consumer markets of Asia and the Middle East, with Shanghai premiums back above 10 per ounce, said Ash. That suggests that China has worked through 2020s glut of supply.
The market is also seeing strong interest from private investors in the West, he said, with daily demand on BullionVault around twice the 2020 level over the last 7 days.
Gold for April delivery on Comex was up 8.40, or 0.5, at 1,737.20 an ounce. Prices on Friday settled at 1,728.80, the lowest mostactive contract finish since June 2020.
Mondays move comes after gold, based on the mostactive contract, saw a weekly decline of about 2.7 and a loss of 6.6 for the month, which was its largest monthly fall since November of 2016.
The 10year benchmark Treasury note touched a yield around 1.55 last Friday but was around 1.43 on Monday.
The Federal Reserve has suggested the climb in yields reflects upbeat expectations for an economic recovery fueled by the vaccine program and the likelihood of…