However, that safe-haven demand is likely to wane as Treasury yields. Rising Treasury yield usually bolster the U.S. dollar and with commodities such as gold denominated in dollar, a stronger greenback crimps commodities prices.
“As rates rise, many factors that supported gold during its up cycles are acting as bearish drivers, analysts say. During the metals’ rallies, riskier equity markets and higher inflation bolstered investors’ appetite for the precious metal. This time around, the expected monetary policy shift is likely to further boost the greenback, making dollar-denominated gold futures more expensive for buyers who use other currencies to fund their purchases,” according to Barron’s.
SPDR Gold Shares
Tom Lydon’s clients own shares of GLD.