World gold price fell to 3-week low

The precious metal fell nearly $15 on the re-nomination of Fed Chair Jerome Powell, sparking interest rate hikes.

Closing the trading session on November 23, each ounce of world gold for immediate delivery fell by nearly 15 USD to 1,789 USD - the lowest since the beginning of the month. The Dollar Index rose slightly yesterday, making gold more expensive for holders of other currencies. Yields on US government bonds also increased.

"Gold has been sold out in panic over the last 48 hours. I think the main reason is the increase in 10-year US bond yields," said Phillip Streible, market strategist at Blue Line Futures.

Gold price has continuously decreased in recent sessions.

Investors are betting that Powell will accelerate the normalization of monetary policy, to better deal with rising consumer prices. Mr. Powell and Treasury Secretary Janet Yellen are expected to appear before the US Senate Banking Committee next week.

Currently, the price of gold has dropped by nearly $100 from a five-month high at $1,876 made last week. However, Ross Norman - an independent analyst said that at present "it is too early to remove gold from the portfolio". "Inflation is still accelerating and European countries are also re-imposed restrictions," he said.

Gold is considered a traditional tool to hedge against inflation. However, rising US bond yields challenged this status, as it increased the opportunity cost of holding gold.

Ha Thu (according to Kitco, Reuters)

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