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Gold Is The Worst Performer So Far In 2021; Show Worst Start Since 1991


After phenomenal gains in the previous year, gold has started off this century at its worst in 30 years.

On a yearly basis, the gold prices have drifted lower by 6 percent on a year to date basis. And even as it pared some of the earlier day's losses on weakening of the dollar, the spot prices havereceded sharply lower to a 7-month low.

Gold Is The Worst Performer So Far In 2021; Show Worst Start Since 1991

Analysts' view on gold prices direction

There is seen a deep slump in gold prices and analysts see that there could be seen further losses.

Bloomberg Commodity Index

In the index, gold is the laggard and is the worst performer for the year 2021. In the previous year, pressure due to the lowdown from the pandemic, low interest rate, stimulus spending boosted gold returns.

Gold's losses are due to sudden spike in US Treasury yield and dollar

Now as the economic recovery hopes gathered pace after economies world over have started off with the vaccination drive, the US dollar and US treasury yield have spiked, increasing opportunity cost of holding the precious yellow metal.

With "rates going higher and inflation expectations peaking out, we're seeing a lot of profit-taking in gold and people are going from gold into industrial metals such as copper," said Peter Thomas, senior vice president at Zaner Group in Chicago. "It's a perfect storm."

Gold's start to the year is the worst since 1991, according to data compiled by Bloomberg. A gain in Treasury yields is weighing on demand for non-interest-bearing bullion, with the metal extending losses after forming a so-called death-cross pattern earlier this week. Yields on 10-year Treasuries climbed to the highest level in about a year this week.

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