Gold prices remained under pressure on Wednesday trading around the $ 1,730 per ounce level, amid rising expectations that U.S. treasury yields would rise higher following the implementation of major economic stimulus.
The gold spot traded flat at $ 1,731 per ounce ahead of the opening of the European session, while gold futures traded negatively at $ 1,729 per ounce (2.30pm Malaysian time).
The benchmark U.S. treasury yield dropped for the fourth day in a row after jumping to a one-week high late last week, but still near 1.4%.
This strengthening caused the gold-yellow metal trade to be limited from rising above the 8-and-a-half month high it reached yesterday at $ 1,707 per ounce.
Investors are now looking forward to the debate on the $ 1.9 trillion stimulus package bill that will be discussed this week.
The stimulus package should support rising gold prices which are seen as a hedge against inflation. However, significant movements in government bond yields will also weaken the precious metal.
