Gold prices came up slightly higher on Wednesday, gaining its second straight finish in positive territory. Meanwhile the US Dollar and US Bond yields both experienced a slight backslide which provided the necessary support for bullion to rise.
In December gold added $2.70, or 0,2% to end at $1,221 an ounce. However, the rising value of the USD makes owning gold a less attractive prospect. The reason being is that wealthy treasury yields often undercut the benefits of owning the precious metal that doesn’t bear a yield. Basically, a strong dollar makes the dollar-backed commodity significantly more expensive for buyers using foreign currencies.
The ten year treasury note yield TMUBMUSD10Y, -0.34% was standing at 2.96% late on Tuesday, while the ICE U.S. Dollar Index DXY, -0.05% also fell slightly, less than 0.1% lower to 95.16.
The dollar index is a gauge of the dollar itself against a half dozen rival currencies.
This was the first time Gold has managed to post back to back wins since July 25th according to Fact Set Data.