UNITED STATES November 28 2016 2:14 PM

NEW YORK (Scrap Register): The swift rise in Treasury yields in recent weeks is one of the main factors that has hurt gold prices, said Commerzbank in a snippet. 

Higher yields both boost the U.S. dollar, which in turn tends to pressure gold, and increases the so-called opportunity cost, or lost income from holding a non-yielding asset like gold instead of an interest-rate product. 

Comex December gold fell as far as $1,170.30 an ounce overnight, its lowest level since February, although it bounced back as far as $1,188 as on Friday.

Commerzbank believes that the steep rise in interest rates in the U.S. is one of the main reasons for the latest gold-price slide. Within two weeks, 10-year rates there climbed from 1.7% to 2.4% p.a. 

Many market participants clearly expect the U.S. Federal Reserve to hike interest rates several times over the next few months as inflation looks set to rise in the wake of Donald Trump’s (U.S. presidential) election victory, and are therefore selling gold. Gold does not yield any interest, after all.