Author: Paul Ploumis13 May 2015 Last updated at 05:43:06 GMT
(Kitco News) - Financial markets continue to digest the strong selloff in bond markets overnight, boosting bond yields, which move inversly to prices.
Higher bond yields are historically negative for gold because of higher opportunity costs.
Alex Thorndike, senior precious metals dealer at MKS, says he is surprised that gold has not sold off as yields on 10-year treasury notes have rallied 40 basis points in less than a month.
In fact, gold prices have rallied in the face of higher yields, last trading at $1,190.60 an ounce, up more than 0.5% on the day.
“Perhaps more concrete evidence that [the U.S. dollar] is resuming its bull trend may be required before a move below $1175-80 is initiated,” he says.
Courtesy: Kitco News