Gold’s rout is not yet done. Prices sank below $1 900/oz on Tuesday, extending the precious metal’s slump into a second day after the haven lost more than 5% in the week’s opening session.
After setting a record above $2 000/oz last week, gold’s rally has come to a juddering halt as US bond yields advanced, eroding the haven’s appeal. The swift drop followed modest outflows from gold-backed exchange-traded funds, and a 15-day run in overbought territory for the relative strength index.
Gold had been on a tear in 2020, and the reversal represents a challenge for the metal’s backers. The haven has been favored as the coronavirus pandemic pummeled the global economy, prompting central banks and governments to deploy massive stimulus.