InstaForex

September 27, 2021

What Happens To Gold After A Severe Plunge?

 Gold prices were stable as trading entered the European session, supported by a weak greenback dollar, but gains were limited by 10 -year high U.S. treasury yields.


Spot gold traded hovering at $ 1,756 an ounce, while gold futures were up 0.3% at $ 1,757 an ounce.

Gold moved in tandem with the depreciation of the US dollar amid positive sentiment boosting demand for riskier assets.


Although the US dollar weakened, US bond yields remained around their highest level since July at 1.44%, causing gold trading to be limited around the $ 1,760 per ounce price level.



Market focus is now targeted at speeches by several Federal Reserve (Fed) policymakers, this week including Chairman Jerome Powell who will testify before Congress on the central bank’s policy response to the pandemic.


Late last week, markets had witnessed Powell’s speech saying the Fed was ready to pull back on economic stimulus.


Meanwhile, investors are also watching developments on Chinese real estate company Evergrande, which is embroiled in a debt crisis. The firm will reportedly make interest payments on offshore bonds this week, after missing out on doing so last week.