Choose country & language:

The surge in real yields pushes the gold price down

Home >  Daily Market Digest >  The surge in real yields pushes the gold price down

Written by:
Myrsini Giannouli

21 April 2022
Share the article

Gold price has been weighed down by the rising dollar and strong US yields. The dollar has gained strength these past few weeks, with the dollar index rising at the 101 level, spurred by hawkish Fed rhetoric. 

This week, the rise in US real yields has pushed the gold price down. Real yields have been boosted by a tightening in the Fed’s monetary policy, with the 10-year real treasury yield hitting positive territory on Tuesday. Real yields compete directly with gold, which is a non-interest-bearing asset, and their rise puts pressure on the price of gold.

On Wednesday though, yields withdrew across the US treasury curve, with the US 10-year treasury note falling from 3% to approximately 2.8%. The dollar also withdrew on Wednesday, providing support for the price of gold. 

Gold price experienced some volatility on Wednesday, trading around $1,950 per ounce. If the price of gold decreases, support may be found near $1,893 per ounce and further down at 1,877 per ounce, while resistance may be found at around $2,000 per ounce.

The price of gold has been driven by conflicting market forces over the past weeks. On one hand, gold is supported by intensifying tensions between Russia and Ukraine, as well as by new western sanctions on Russia. On the other hand, the gold price is undermined by increasingly hawkish Fed policy, which boosts the dollar and real yields.

Gold’s safe-haven status supports its price, as reports of violent Russian attacks against Ukraine and new sanctions on Russia drive investors away from riskier assets. The conflict in Ukraine has triggered a risk-aversion sentiment, propelling the price of gold to $2,050 per ounce last month. 

Sanctions against Russia and increasing energy costs have been driving commodity prices up. The US and the EU have further increased economic sanctions on Russia, with the EU targeting the energy sector for the first time, banning coal imports with an estimated total worth of €4bn a year. Rising energy prices contribute to rising inflation, which is hitting record highs in the US, the EU, the UK, and many other countries. Global inflationary pressures support gold price since it is often used as an inflation hedge.

Concerns about the state of the economy in China, after the fresh rise of Covid cases and the lockdown in Shanghai, have also been boosting the price of gold.

XAUUSD 1hr chart


The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article:

Latest news

Dollar plummets in the aftermath of Silicon Valley collapse

Myrsini Giannouli 14 March 2023

Gold soars as investors turn toward safe-haven assets

Myrsini Giannouli 14 March 2023

Oil prices turbulent amidst market chaos

Myrsini Giannouli 14 March 2023

Crypto markets volatile after Silicon Valley Bank collapse

Myrsini Giannouli 14 March 2023

Why TopFX



industry presence
as a Liquidity Provider


from 0.0 pips

and reliable execution



client funds



customer support

Open your Live Account in 3 Steps
Step 1

Fill in the registration
form and click
"Create account".

Step 2

Once you are in the client secure area, please proceed with uploading your Proof of Identity and Proof of Residence.

Step 3

When your live account is approved, you can deposit funds and start trading on your chosen platform!