Gold price rally as United States Treasury bond yields slump

Gold price jumped over $30 as the United States Treasury bond yields marked the biggest daily slump in a week the previous day. The reason could be linked to the multiple announcements from the Federal Reserve (Fed) and the Treasury department that bolstered fears of baking fallouts and drowned the US Dollar, due to the Fed’s dovish hike. That said, the US 10-year and two-year Treasury bond yields stay pressured around 3.45% and 3.96% at the latest, after falling 4.80% and 5.50% in that order the previous day.

US Federal Reserve failed to push back the banking sector fears despite announcing a 0.25% rate hike. The reason could be linked to the statements saying, “some additional policy firming may be appropriate,” instead of previous remarks like “ongoing increases in the target range will be appropriate”.

It should be noted that Fed Chair Jerome Powell and US Treasury Secretary Janet Yellen’s comments were more important as Fed’s Powell said that officials do not see rate cuts for this year, which in turn allowed breathing space to the greenback bears in the last. On the other hand, US Treasury Secretary Janet Yellen ruled out considering “blanket insurance” for bank deposits. Recently, Bloomberg also came out with the news suggesting that the Federal Deposit Insurance Corporation is said to delay the bid deadline for a Silicon Valley private bank.

Elsewhere, fears from the Russia-China ties and cautious mood ahead of the key central bank announcements seem to also weigh on the market sentiment. However, chatters surroudning China’s ability to mark notable growth, despite global banking rout, keeps the Gold buyers hopeful.

Amid these plays, the S&P 500 Futures print mild gains even after Wall Street’s downbeat performance.